Oil prices rose on Monday, recouping part of last week’s 4 per cent slide, as concerns over potential disruptions from escalating U.S.-Venezuela tensions outweighed lingering oversupply worries and the effects of a potential Russia-Ukraine peace deal.
Brent crude futures rose 25 cents, or 0.4 per cent, to $61.37 a barrel at 0055 GMT, and U.S. West Texas Intermediate crude was at $57.67 a barrel, up 23 cents, or 0.4 per cent.
“Peace talks between Russia and Ukraine have swung between optimism and caution, while tensions between Venezuela and the U.S. are escalating, raising concerns about potential supply disruptions,” said Tsuyoshi Ueno, a senior economist at NLI Research Institute.
“Still, with markets lacking clear direction, oversupply concerns remain strong and unless geopolitical risks escalate sharply, WTI could fall below $55 early next year.”
Ukrainian President Volodymyr Zelenskiy offered to drop his country’s aspiration to join the NATO military alliance as he held five hours of talks with U.S. envoys in Berlin on Sunday. Negotiations are set to continue on Monday.
U.S. envoy Steve Witkoff said “a lot of progress was made,” though additional details were not divulged.
On Friday, Ukraine’s military said it attacked a major Russian oil refinery in Yaroslavl, northeast of Moscow; industry sources said the facility had suspended output.
Russian state oil and gas revenue in December is likely to fall by nearly half from a year earlier to 410 billion roubles ($5.12 billion) due to lower crude prices and a stronger rouble, Reuters calculations showed on Friday.
A possible peace deal could eventually increase Russian oil supply, which is currently sanctioned by Western countries.
Meanwhile, Venezuelan opposition leader Maria Corina Machado on Friday promised political change after slipping out of the country in secret to collect the Nobel Peace Prize, as the shockwaves intensified from the Trump administration’s seizure of an oil tanker last week.
Venezuela’s oil exports have fallen sharply after the seizure and fresh sanctions on shipping companies and vessels doing business with the Latin American oil producer, according to shipping data, documents and maritime sources.
On the supply side, U.S. energy firms last week cut the number of oil and natural gas rigs operating for a second time in three weeks, energy services firm Baker Hughes said on Friday.
