Oil posts weekly loss on oversupply concerns

[HOUSTON] Oil prices closed lower on Friday (Dec 12), marking a 4 per cent weekly decline as a supply glut and a potential Russia-Ukraine peace deal outweighed worries about any impact from the US seizure of an oil tanker near Venezuela. Brent crude futures settled 16 US cents down at US$61.12 a barrel, while US West Texas Intermediate crude was down 16 US cents at US$57.44.

Both benchmarks fell by about 1.5 per cent on Thursday and have lost more than 4 per cent this week. “The market continues to be weighed down by the crude oil supply situation… on the other hand, the oil market is ignoring the tension between the US and Venezuela,” said Andrew Lipow, president of Lipow Oil Associates.

The US seized a sanctioned oil tanker off the coast of Venezuela, US President Donald Trump said on Wednesday. The US is preparing to intercept more ships transporting Venezuelan oil after the seizure of a tanker this week, six sources close to the matter said on Thursday.

Traders and analysts largely shrugged off worries about the impact of the tanker seizure, pointing to ample supply in the markets. International Energy Agency (IEA) forecasts published on Thursday indicated that global oil supply will exceed demand by 3.8 million barrels per day next year – a volume equal to almost 4 per cent of world demand.

Data in Opec’s report, also issued on Thursday, indicated that world oil supply will match demand closely in 2026, in contrast to the IEA’s view. Some price-supportive factors remain, including the ramping up of tensions between the US and Venezuela, and Ukrainian drone strikes on a Russian oil rig in the Caspian Sea, said Janiv Shah, analyst at Rystad Energy.

Russia’s seaborne oil product exports in November fell by just 0.8 per cent from October, with the completion of refinery maintenance helping to offset a slump in fuel exports from southern routes such as the Black Sea and Azov Sea, data from industry sources and Reuters calculations showed. REUTERS