US Economic Growth Surpasses Expectations
On Tuesday, oil prices closed higher as investors evaluated a stronger-than-expected US economic growth and the risk of supply disruptions from Venezuela and Russia.
The Brent crude futures closed up by 0.5%, or 31 cents, at $62.38 per barrel. The West Texas Intermediate (WTI) US crude rose by 0.64%, or 37 cents, to $58.38 per barrel.
Mexico’s export blend was at $54.99 per barrel, up by 0.86%, or 47 cents.
The US Commerce Department’s Bureau of Economic Analysis reported on Tuesday that the US economy grew faster than expected, driven by robust consumer spending.
“The market is trying to decide whether we should be more excited about demand from strong growth or worried that the Fed will need to curb this growth to control inflation,” said Phil Flynn, senior analyst at Price Futures Group.
Venezuela Supply Risk
Investors were also weighing the risk of supply disruptions from Venezuela.
US President Donald Trump announced earlier this month a block on all tankers sanctioned entering and leaving Venezuela, keeping tanker owners on edge.
“With the declining storage capacity in Venezuela, there are growing risks that the country may have to shut part of its production,” said UBS analyst Giovanni Staunovo.
Venezuelan shipments have slowed, and most vessels now carry oil only between domestic ports following US action against more tankers.
Trump stated on Monday that the US might keep or sell the seized Venezuelan oil off its coast.
Russian Supply Disruptions
Supply disruption support from Russia also bolstered oil prices.
Russian forces attacked the Ukrainian Black Sea port of Odesa on Monday night, damaging port facilities and a ship, the second attack in less than 24 hours, while Ukrainian drone strikes damaged two ships, two piers, and caused a fire in a village in Russia’s Krasnodar region.
Ukrainian forces have targeted Russia’s maritime logistics, focusing on shadow tankers attempting to bypass sanctions against Russia.
Barclays expects well-supplied oil markets in the first half of 2026, but the bank noted that the surplus will shrink to just 700,000 barrels per day in the fourth quarter of 2026. A prolonged disruption could further tighten the market.
Key Questions and Answers
- What drove the rise in oil prices? Stronger-than-expected US economic growth and concerns about supply disruptions from Venezuela and Russia.
- How has US economic growth impacted oil prices? The robust consumer spending in the US economy has led investors to anticipate increased oil demand, pushing prices up.
- What is the risk from Venezuela’s oil supply? US sanctions on tankers entering and leaving Venezuela have caused uncertainty about the country’s ability to maintain oil production, potentially leading to supply disruptions.
- How have Russian supply disruptions affected oil prices? Attacks on Ukrainian ports and logistics targeting Russian shadow tankers have increased concerns about a tightening oil market.
