Crude oil prices closed higher on Tuesday, but gains were pared during the overnight session following mixed signals from geopolitical developments and inventory data. Despite initially recovering losses from the previous session, prices retreated after the U.S. Energy Information Administration (EIA) reported a build in crude and refined product stockpiles.
Market sentiment initially improved as traders shrugged off concerns about a potential Russia-Ukraine peace deal lifting sanctions on Russian oil supplies. Reports of an explosion along Russia’s "Friendship" oil pipeline further supported prices during Asian and European trading hours. However, the rally lost steam after the EIA data showed a 574,000-barrel increase in U.S. commercial crude inventories, alongside significant builds in gasoline and distillate stocks.
Geopolitical tensions remain a key driver of oil price volatility. While Russia expressed willingness to continue discussions with the U.S. on Ukraine, Kremlin officials indicated that Europe remains a major obstacle to peace negotiations. Russian President Vladimir Putin warned that Russia is prepared for conflict if Europe escalates hostilities. Meanwhile, Ukrainian President Volodymyr Zelensky voiced concerns about waning U.S. interest in the peace process.
On the supply side, Venezuela’s oil exports rose to 921,000 barrels per day (bpd) in November, marking the third-highest monthly volume this year despite U.S. sanctions. The country’s shipments to the U.S. increased to 150,000 bpd, while imports of light crude and fuels more than doubled.
Key Price Movements: - WTI crude rose 0.78% to $59.1/barrel - Brent crude gained 0.35% to $62.67/barrel - China’s INE crude futures edged up 0.36% to 450.9 yuan/barrel
Market participants expect oil prices to remain volatile amid conflicting supply-demand dynamics, with geopolitical risks and inventory trends continuing to drive near-term price action. Traders are advised to maintain strict risk management protocols in this uncertain environment.
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