DTN Oil Update
Oil Futures Steady as Oversupply Balances Venezuela Risks
SECAUCUS, N.J. (DTN) -- Oil futures steadied on Tuesday, Dec. 23, as oversupply concerns balanced U.S. actions against Venezuelan oil amid thinner and volatile trading conditions typical for a holiday season.
Tit-for-tat attacks between Russia and Ukraine -- aimed at the maritime assets of each other -- however provided some geopolitical risk to oil, which typically rises in such circumstances.
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NYMEX WTI crude for February delivery was down by $0.12, or 0.2%, to $57.89 bbl.
ICE Brent futures for February slid by $0.20, or 0.2%, to $61.87 bbl.
Downstream, NYMEX front-month gasoline dipped by $0.0060, or 0.4%, to $1.7362 gallon. Front-month ULSD bucked the downtrend, climbing by $0.0156, or 0.7%, to close at $2.1743 gallon.
Crude to fuel futures were broadly higher earlier on Tuesday, extending for a fifth straight day a rally on immediate supply risks. "All these year-end risk premia have given a flip to oil, which should otherwise be going down on heavy supply and seasonally thinner holiday trading conditions," said John Kilduff, partner at New York energy hedge fund Again Capital.
Crude futures hit 2021 lows last week, sending WTI and Brent beneath the key $55 and $60 mark, respectively, on prospects for Russia-Ukraine peace that could lift sanctions on Russian oil, adding millions of more barrels to an already oversupplied market. The International Energy Agency has warned that supply could exceed demand by 3.8 million to 3.84 million bpd in 2026.
WTI and Brent have, however, rebounded by about 5% from the lows of last week as the market's focus turned to near-term supply risks following seizures by U.S. forces over the past two weeks of two tankers carrying Venezuelan oil and their pursuit of another such vessel in international waters.
The actions came after a naval blockade of Venezuelan oil imposed by the Trump administration, which supports the Latin American country's democratic opposition leader Maria Corina Machado against Venezuelan President Nicolas Maduro. OPEC member Venezuela exports about one million bpd.
Despite the U.S. actions, more than a dozen vessels have loaded oil off the Venezuelan coast since the naval blockade announced by the Trump administration, reported Bloomberg, which also cited ship tracking data showing a Russian crude cargo from U.S.-sanctioned Rosneft delivered to a Chinese oil terminal after three months at sea.
