Geopolitical tension disrupts the supply of international oil prices to maintain a rise

The Zhitong Finance App learned that traders are weighing the geopolitical tension from Venezuela to Russia and Iran, and oil prices have continued to rise as a result. Brent crude oil stabilized around $62 per barrel after rising 2.1% on Monday, while WTI crude was above $58 per barrel. Faced with a partial blockade by the United States, Venezuela has begun to close its oil wells in the region with the world's largest oil fields. The blockade restricted crude oil exports, causing the local oil storage tanks to fill up. According to another report, US President Trump said that the US attacked a facility in Venezuela.

Earlier, Russian President Vladimir Putin said he would adjust his negotiating position after his home was attacked by drones, which made Trump's efforts to end the war in Ukraine face new obstacles. Meanwhile, Trump has vowed that if Iran rebuilds its nuclear program, the US will strike Iran again.

As OPEC+ increases production to regain market share, global crude oil production may exceed demand, and crude oil prices are expected to drop sharply. According to data from Vortexa Ltd., one sign of sufficient supply is that crude oil volume anchored on global tankers for at least 7 days surged 15% last week, bringing the total crude oil volume close to the highest level since 2020, which was set in November last year.

Gao Jian, an analyst at Qisheng Futures, said, “Geopolitical turmoil has greatly weakened the problem of oversupply in the market and even covered up this problem. Unless these disputes are resolved, volatility and price support will continue; although in the context of increased oversupply, the overall market trend may turn downward.”

According to US government data, as of December 19, the weekly increase in crude oil inventories at the Cushing Crude Oil Hub in Oklahoma recorded the biggest weekly increase since late October. Across the US, gasoline and distillate stocks have also increased. Due to the Christmas holidays, the release of this data was delayed from last week.

More information on the state of US oil will be provided later this week, and the American Petroleum Institute will release an estimate of inventory changes later on Tuesday. Subsequently, official data for the week ending December 26 will be released on Wednesday.