WTI at $58 After U.S. Seizures of Venezuelan Oil


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Oil futures settled up by almost 3% on Monday (12/22), 
rebounding sharply from last week's multi-year lows, on reports that U.S. 
forces had seized in less than a fortnight a second Venezuelan oil-laden tanker 
while actively pursuing a third.

   A Ukrainian drone attack on Russian assets in the Black Sea region and the 
killing of a Russian general which Moscow blamed on Kiev threatened to inflame 
the war between the two states. An aggressive response by the Kremlin could 
thwart peace efforts brokered by the U.S. between the two sides and delay the 
removal of Western sanctions on Russian oil.

   NYMEX WTI crude for January delivery settled up by $1.49, or 2.6%, at $58.01 
bbl. Last week, January WTI hit a 2021 low of $54.89 on concerns of brightening 
prospects for Russia-Ukraine peace that could eventually add millions of 
currently sanctioned Russian barrels to an oversupplied market.

   ICE Brent futures for February settled up by $1.60, or 2.7%, at $62.07 bbl. 
February Brent slid beneath the key $60 bbl mark last week.

   Downstream, NYMEX front-month gasoline advanced by $0.034, or 2%, to close 
at $1.7422 gallon, after dropping below the $1.60 mark last week.

   Front-month ULSD climbed by $0.0362, or 1.7%, to close at $2.1581 gallon.

   Oil and fuel futures rose after news broke that U.S. forces had apprehended 
a Panama-flagged vessel carrying Venezuelan oil in the Caribbean on December 20 
and were in pursuit of another. These were in follow through to the tanker 
laden with Venezuelan oil seized and anchored off the Texas coast since 
December 10.

   The actions against Venezuela came after the Trump administration announced 
last week a naval blockade to prevent so-called sanctioned tankers from 
accessing oil from the Latin American nation and OPEC member. The tanker 
seizures have raised concerns about near-term oil supplies despite a global 
glut.

   A Ukrainian drone attack damaged two vessels, two piers and sparked a fire 
in a village on the Black Sea coast in Russia's Krasnodar region, regional 
authorities were quoted saying on Monday. The Black Sea region is vital for 
Russia's energy exports.

   On the trading front, NYMEX will experience some changes to its schedule 
this week due to the impending Christmas holiday.  Oil markets will close at 
1:00 p.m. Eastern Time (ET) on December 24, earlier than their regular 2:30 
p.m. ET schedule, and will be shut on December 25.  Regular trading will 
commence on December 26.

    

    

   
 

    

    




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