Overview of Oil Market Stability and Geopolitical Concerns
On the day before Christmas, oil prices remained relatively stable in a quiet market. The Brent crude oil price for February delivery dipped by 0.22% to $62.24, while the West Texas Intermediate (WTI) for February delivery fell slightly by 0.05% to $58.35.
US Pressure on Venezuela Causes Market Concerns
Despite the concerns in the market, Venezuela’s oil production is minimal, at just one million barrels per day. Recently, the United States has exerted pressure on Venezuela, causing market unease. This includes deploying a significant military presence in the Caribbean, establishing a naval blockade against Venezuela, and accusing President Nicolás Maduro of financing “narcoterrorism.”
- Two suspicious tankers carrying Venezuelan crude were seized by US naval forces.
- Ukrainian President Volodymyr Zelensky announced that Ukraine secured several concessions in the latest US plan to end the war with Russia.
Parallel Developments and Market Impact
According to John Plassard of Cité Gestion Private Bank, there have been “new Ukrainian strikes against Russia’s energy infrastructure” along the Black Sea, a crucial route for Russian exports. However, despite this bullish factor, the market still anticipates a medium-term supply surplus, which explains the low oil prices.
Key Questions and Answers
- What are the current oil prices? The Brent crude oil price for February delivery closed at $62.24, while the West Texas Intermediate (WTI) for February delivery ended at $58.35.
- Why are oil prices stable despite US pressure on Venezuela? Although the market is concerned about the situation, Venezuela’s oil production is minimal. The US pressure includes military deployment in the Caribbean, a naval blockade, and accusations against President Nicolás Maduro.
- What other developments are impacting the oil market? Ukraine secured concessions in the US plan to end the war with Russia, while there have been reported strikes on Russia’s energy infrastructure along the Black Sea route.
- Why are oil prices expected to remain low? Despite positive developments, the market anticipates a medium-term supply surplus, contributing to the current low oil prices.
