Oil Prices Maintain Gains Amid Rising Geopolitical Tensions

SadaNews - Oil retained most of its gains as traders balanced the ongoing geopolitical tensions from Venezuela to Russia and Iran against concerns of oversupply.

Brent crude traded below $62 a barrel after rising by 2.1% on Monday, while West Texas Intermediate was near $58.

Venezuela began shutting down wells in an area that contains the largest reserves in the world, facing a U.S. blockade. Separately, U.S. President Donald Trump stated that the United States targeted a facility inside the country.

This comes at a time when Trump's efforts to end the war in Ukraine faced new obstacles after Russian President Vladimir Putin said he would reconsider his negotiating stance following alleged drone attacks targeting his residence. Meanwhile, the U.S. president pledged to deliver another blow to Iran if it rebuilds its nuclear program.

Crude Prices Head Towards Sharp Annual Decline

Crude is still on track to record a sharp annual decline amid fears that global production will exceed demand. At the same time, the "OPEC+" alliance increased production to try to regain market share.

Among the signs of ample supplies, the amount of oil stored around the world on tankers that remained stationary for at least seven days jumped by 15% last week, according to "Fortexa". This total is approaching the peak recorded last November, which was the highest since 2020.

Gao Jian, an analyst based in Shandong at "Chicheng Futures", said that "political disruptions have largely overshadowed the narrative of oversupply in the market".

He added: "Unless these conflicts are resolved, volatility and price support will continue," but he noted that the overall market trend may shift to a downward direction amid worsening oversupply.

In the United States, government data showed that crude inventories at the Cushing hub in Oklahoma recorded the largest weekly increase since late October for the week ending December 19.

Nationally, gasoline and distillate inventories also rose. The release of this data was delayed from last week due to the Christmas holiday.