More Weekly Losses For Oil Despite U.S. Considering War With Venezuela

Geopolitical tensions are no match for chronic concerns over a global glut: File Image/Pixabay

Oil eked out more gains on Friday based again on Washington's blockade of Venezuelan oil tankers, but it wasn't enough to prevent Brent and West Texas Intermediate from incurring a weekly loss of about 1 percent.

After U.S. president Donald Trump told media  he was leaving the possibility of war with Venezuela on the table and imposing sanctions on family members and associates of that country's president Nicolas Maduro, Brent settled up 65 cents to $60.47 per barrel, while WTI settled up 51 cents to $56.66.

Venezuela, a founding member of the Organization of the Petroleum Exporting Countries (OPEC), has the largest proven oil reserves in the world and exported about 749,000 barrels per day this year, according to Kpler.

Analysts were also awaiting the outcome of the Russia/Ukraine peace talks, as Russian president Vladimir Putin stated he wouldn't compromise on his terms for ending the war and that the onus was on Ukraine and Europe to make the next moves.

Putin's remarks were accompanied by yet another Ukraine drone attack, this time an aerial drone that struck a Russian "shadow fleet" oil tanker in the Mediterranean Sea.

But all of this amounted to nothing in terms of lifting oil out of its range bound rut: Haris Khurshid, chief investment officer at Karobaar Capital, said, "The dominant sentiment right now is definitely a structural surplus; that glut mindset is outweighing geopolitical flare-ups from Russia to Venezuela."

In other oil news on Friday, Reuters calculated that Russia's tax proceeds from crude production in January could fall to about $4.7 billion, the lowest monthly take since late 2022 as well as a 16 percent drop from December and a plummet of more than 50 percent compared with January last year.

Russia's export blends being cheaper in December than in November were reportedly partly responsible for the declines; the former Soviet Union depends heavily on oil income to fund military spending and social obligations.