Oil prices gain on US interception of Venezuelan oil tanker over weekend

OIL prices climbed in early trade on Monday after the US intercepted a Venezuelan oil tanker over the weekend.

Brent crude futures rose 44 cents, or 0.73 per cent, to US$60.91 per barrel by 0141 GMT, while US West Texas Intermediate (WTI) crude rose 40 cents, or 0.71 per cent, to US$56.92.

The US Coast Guard is also pursuing an oil tanker in international waters near Venezuela, in what would be the second such operation over the weekend and the third in less than two weeks if successful, officials told Reuters on Sunday.

The rebound in oil prices has been sparked by geopolitical developments starting with US President Donald Trump’s announcement of a “total and complete” blockade on sanctioned Venezuelan oil tankers and subsequent developments there, followed by reports of a Ukrainian drone strike on a Russian shadow fleet vessel in the Mediterranean Sea, IG analyst Tony Sycamore said.

“The market is losing hope that the US-brokered Russia-Ukraine peace talks will reach a lasting agreement any time soon,” said Sycamore.

“These developments are helping to offset ongoing oversupply concerns, and combined with the false break lower last week which has caught the market on the wrong foot, the balance of risks is very close to shifting back toward the upside in crude oil.”

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Brent and WTI were down about 1 per cent last week after both crude benchmarks fell about 4 per cent in the week of Dec 8.

US special envoy Steve Witkoff said on Sunday talks between US, European and Ukrainian officials over the past three days in Florida aimed at ending Russia’s war in Ukraine had focused on aligning positions. Those meetings and separate talks with Russian negotiators had been productive, he said.

However, Russian President Vladimir Putin’s top foreign policy aide said on Sunday that changes made by the Europeans and Ukraine to US proposals for an end to the war in Ukraine did not improve prospects for peace. REUTERS