Oil Prices Soften as Markets Shrug Off Supply Risks


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil prices fell Tuesday (12/2) 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.




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