Oil Futures Climb 5th Consecutive Day on Venezuela Worries


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil futures settled higher Tuesday (12/23) as risks to 
Venezuelan supply supported a thinly-traded, volatile market typical of the 
holiday season.

   Adding further support was a higher-than-expected third-quarter annualized 
U.S. GDP growth of 4.3% that came in above Wall Street's 3.3% forecast. 

   Reciprocal attacks on maritime assets by Russia and Ukraine also reinforced 
the geopolitical risk premium in oil, providing a bullish tailwind for prices 
in an otherwise oversupplied global market.

   NYMEX WTI crude for February delivery settled up by $0.37, or 0.6%, at 
$58.38 bbl after falling to $57.74 earlier in the session.

   Last week, WTI hit a 2021 low of $54.89 bbl as prospects for Russia-Ukraine 
peace heightened expectations that Western sanctions could soon be lifted on 
Russian oil, adding millions of barrels to a market already saturated with 
supply.

   ICE Brent futures for February settled up by $0.31, or 0.5%, at $62.38 bbl. 
Brent tumbled beneath the $60 bbl support last week.

   Downstream, NYMEX front-month gasoline was virtually flat, rising by $0.0010 
to close at $1.7432 gallon. Front-month ULSD advanced by $0.0325, or 1.5%, to 
close at $2.1906 gallon.

   Crude futures swung through Tuesday's session as traders balanced near-term 
risks to Venezuelan supply versus broader concerns about a global oil glut. The 
International Energy Agency has warned that supply exceed demand by 3.8 million 
to 3.84 million bpd in 2026.

   "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.

   Futures of crude to fuel have risen broadly since the start of this week on 
news that U.S. authorities had seized two vessels carrying Venezuelan oil over 
the last fortnight and were in pursuit of a third.

   The U.S. 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. clampdown on Venezuelan oil, Bloomberg reported that more 
than a dozen vessels have loaded oil off the coast of the Latin American 
country since the naval blockade announced by the Trump administration. It also 
cited ship tracking data showing Russian crude from Moscow's sanctioned Rosneft 
delivered to a Chinese oil terminal after three months at sea.

   Market participants will be focused later on the day on weekly U.S. 
inventory data from the American Petroleum Institute, which is due to report 
after 4:30 p.m. ET data for the week ended December 19.

   On the trading front, the NYMEX will have an abbreviated session for 
Wednesday (12/24), closing at 1:00 p.m. ET instead of its usual 2.30 p.m. ET 
closing. The exchange will remain shut on Thursday (12/25) for the Christmas 
holiday and resume regular trading on Friday (12/26).

    




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