Oil gained for a fifth straight day in thin trading as investors weighed the US clampdown on shipments from Venezuela against weak demand.
West Texas Intermediate rose 0.6% to settle above $58 a barrel, while Brent topped $62. The US has boarded one tanker, seized another and recently pursued a third near Venezuela, as Washington pressures the government of Nicolas Maduro.
Still, nearly half a dozen tankers laden with crude have departed from Venezuela’s coast since the Trump administration intensified efforts to curb Caracas’ oil revenue.
Volumes are trending lower ahead of the December holidays, with many traders away, contributing to exaggerated price swings.
Trump has said the US will keep the oil from the seized tanker. Venezuelan exports represent less than 1% of global supply, but the revenue provides a financial lifeline for Maduro’s government, which has called the US actions piracy.
Geopolitical stresses, including the threat of US land strikes against alleged drug operations in Latin America and the ongoing war in Ukraine, have helped arrest a slide in oil prices that has been underway since mid-June. WTI is down roughly 19% this year, heading for the biggest annual drop since 2020, as increasing supply outpaces demand.
“Price action looks increasingly prone to short-lived spikes rather than a sustained move higher,” said Rebecca Reed-Sperrin, a broker at SCB Group and former derivatives broking desk head at Braemar. “Even a sharp near-term drop in Venezuelan exports would still leave the market comfortably supplied into the first half of next year.”
Commodity trading advisors, which can accelerate price momentum, liquidated short positions to sit at 91% short in WTI on Tuesday, compared with a maximum-short position on Dec. 23, according to data from Bridgeton Research Group.
Meanwhile, a cargo of Russian crude from US-sanctioned Rosneft PJSC has finally been delivered to a Chinese oil terminal after spending three months at sea, ship-tracking data show. Delivering cargoes remains a challenge for Moscow, with a build-up of vessels anchored off the coasts of India and China.
Oil Prices
WTI for February delivery edged up 0.6% to settle at $58.38 a barrel in New York.
Brent for February settlement crept 0.5% higher to settle at $62.38 a barrel.
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