Oil prices increased in early trading on Tuesday, marking a second consecutive session of gains as market participants evaluated the risks associated with Ukrainian drone strikes on Russian energy infrastructure and escalating tensions between the U.S. and Venezuela. Brent crude futures experienced an increase of 14 cents, representing a 0.2% rise, reaching $63.31 per barrel as of 0102, while U.S. West Texas Intermediate crude experienced an increase of 18 cents, representing a 0.3% rise, bringing the price to $59.50 per barrel. Both benchmarks experienced an increase exceeding 1% on Monday. The Caspian Pipeline Consortium announced on Monday the resumption of oil shipments from one mooring point at its Black Sea terminal, subsequent to a significant Ukrainian drone attack on November 29. According to the sources, oil loadings have recommenced through single point mooring 1 (SPM 1), whereas SPM 2 has sustained damage.
The military action reinforces the view that a peace deal is improbable in the near term and indicates that the diesel and gasoil markets are poised to lift the entire complex, according to analysts at Ritterbusch and Associates in a note. In the realm of negotiations, Ukrainian President Volodymyr Zelenskiy articulated on Monday that Kyiv’s foremost objectives are to uphold sovereignty and secure robust security guarantees, while acknowledging that territorial disputes present the most intricate challenges. U.S. envoy Steve Witkoff is scheduled to provide a briefing to the Kremlin on Tuesday. ANZ observed that the expanding U.S. campaign against Venezuela is generating apprehensions regarding potential additional impacts on oil exports.
The President of the United States, Donald Trump, engaged in discussions with senior advisers regarding the ongoing pressure campaign directed at Venezuela, according to a high-ranking U.S. official. On Saturday, Trump stated that the airspace above and surrounding Venezuela should be regarded as “closed in its entirety,” yet he provided no additional information. On Sunday, OPEC+ confirmed a modest increase in oil output for December while opting to pause any further increases in the first quarter of the upcoming year, driven by escalating concerns regarding a potential supply glut.
“Fundamentals tend to dominate in the long run, and we continue to perceive this decline in global balances as likely to drive oil prices down, with probabilities for WTI and Brent respectively reaching the $55 and $59 levels remaining significantly elevated,” Ritterbusch stated.