Oil edges up as oversupply weighs on market
Oil prices inched higher for a second consecutive day as geopolitical risks linked to Venezuela and Russia provided some support to a market weighed down by a bearish oversupply outlook.
Brent crude initially climbed toward $61 a barrel, extending a 1.3% gain from Wednesday, before giving up most of its advances in a volatile trading session, News.Az reports, citing Bloomberg.
In remarks from the White House, US President Donald Trump avoided referencing developments in Venezuela, which currently accounts for less than 1% of global oil supply.
At the same time, the United States is preparing a new round of sanctions targeting Russia’s energy sector, underscoring that an end to the war in Ukraine remains uncertain. However, measures imposed on Moscow so far have had limited impact on global oil markets.
Despite the recent uptick, oil remains on course for an annual decline of roughly 20%, as global supply continues to outpace demand. Earlier this week, US futures fell to their lowest level since 2021 before rising again amid heightened geopolitical tensions. Market indicators from the Middle East to the United States continue to signal underlying weakness in the sector.
“The rally was disappointing given the magnitude of the escalation happening in Venezuela and Russia,” said Keshav Lohiya, founder of consultant HiLo Analytics. “For Venezuela, the question remains how effective this blockade will be, given any disruption in Venezuelan oil exports will predominantly hurt Chinese refiners.”
Activity has thinned in the run-up to next week’s Christmas break, with the aggregate volume of Brent contracts traded on Thursday below the daily average. That could amplify price moves, lifting volatility.
In Venezuela, oil-storage facilities and tankers at its terminals are quickly filling up, according to people familiar with the situation. If they reach maximum capacity, state-owned Petróleos de Venezuela SA could be forced to shut-in wells.
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