DTN Oil Update
Oil Prices Soften as Markets Shrug Off Supply Risks
VIENNA (DTN) -- Oil prices fell Tuesday, Dec. 2, morning, relinquishing some of the gains made on the back of growing supply risks.
The NYMEX WTI contract for January delivery fell $0.30 bbl to $59.02 bbl, and ICE Brent for February delivery retreated $0.32 to $62.85 bbl.
January RBOB gasoline futures softened $0.0188 to $1.8501 gallon, and front-month ULSD futures dropped $0.0288 to $2.3112 gallon.
The U.S. Dollar Index was little changed, down 0.037 points to 99.325 against a basket of foreign currencies.
Oil prices have been supported by a growing geopolitical risk premium amid intensifying attacks on Russian energy infrastructure, new sanctions, and mounting U.S. pressure on oil producer Venezuela.
Kazakh crude oil exports were halted for one day over the weekend after a drone attack damaged a mooring at their Black Sea terminal. On Tuesday, another tanker was struck mid-voyage after loading cargo in Russia, marking the fourth attack on a Russia-linked tanker in less than a week.
Despite the increased risk of supply outages, market sentiment remained bearish as the global crude oil balance is increasingly tilting toward oversupply.
New supply additions have dwarfed demand growth this year, and oil producers in the Middle East still have access to ample idle spare capacity.
Barring a major disruption to global supply, geopolitical risks will continue to have a limited and short-lived impact on price.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]