DTN Oil Update
Oil Futures Climb Again on Venezuela Tanker Blockade
SECAUCUS, N.J. (DTN) -- Oil prices climbed again on Thursday, Dec. 18 as a second day of a U.S. naval blockade on Venezuela lent support to a market otherwise thin on news.
Increasing U.S. actions against Venezuela kept up the risk premium in crude in today's session after U.S. President Donald Trump announced Tuesday, Dec. 16, a naval blockade against all sanctioned tankers attempting to access Venezuelan oil.
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Trump has said that the United States wants to reclaim its "land, oil rights and assets" in Venezuela. U.S. oil firms ExxonMobil and ConocoPhillips were expelled in 2007 from production sharing contracts in that country, leaving Chevron as the only remaining American operator.
Weekly U.S. crude inventory draw reported by the Energy Information Administration (EIA) on Wednesday, Dec. 17, also contributed to the upside in crude futures. The EIA's Weekly Petroleum Status Report showed Wednesday, Dec. 17, that commercial oil reserves dropped by 1.3 million bbl to 424.4 million for the week to Dec. 12.
This morning, the Bureau of Labor Statistics report that U.S. Consumer Price Index (CPI) dipped 0.3% year-on-year in November, bringing the annual rate of inflation for the all-items index to 2.7%. It was the first reading below 3% since August, though still above the U.S. Federal Reserve's 2% target. The data did little to change the bullish sentiment in oil futures.
NYMEX WTI crude for January delivery settled up $0.21, or 0.4%, at $56.15 bbl. It rallied 1.2% on Wednesday, Dec. 17, to recover from the prior session's 2021 low of $54.89.
ICE Brent futures for February settled up $0.14, or 0.2%, at $59.82 bbl, adding to Wednesday's higher settlement of 1.4%. February Brent slid beneath the key $60 bbl support two days earlier.
NYMEX front-month gasoline closed virtually flat, rising $0.0007 gallon, to close at $1.7013. It dropped beneath the key $1.60 mark earlier in the week.
Front-month ULSD was also little changed, settling down $0.0030 at $2.1316 bbl.
The U.S. Dollar Index was up 0.103 points at 98.105 against a basket of currencies.
