"Oil prices were mostly steady today after Monday's rebound. Markets could continue to react to geopolitical developments and their impact on supply risks. The United States' interception of a Venezuelan oil cargo and indications that it may sell the seized crude have lifted the perceived risk of tighter enforcement around Caracas' exports. In parallel, tensions in Eastern Europe could continue to pose risks for shipping in the Black Sea."
"Still, fundamentals could limit extended gains. The bigger headwind for oil prices remains the 2026 surplus narrative. The IEA's December outlook points to supply growth of about 2.4 million bpd in 2026 versus demand growth of nearly 860 thousand bpd, leaving a large projected surplus. In that environment, the market could remain under constant pressure, limiting any rebounds. However, any severe and sustained disruptions could fuel more aggressive price gains."
Oil prices were mostly steady after a rebound, with markets sensitive to geopolitical developments that affect supply risks. The United States intercepted a Venezuelan oil cargo and may sell the seized crude, raising perceived risks of tighter enforcement on Caracas' exports. Tensions in Eastern Europe also pose shipping risks in the Black Sea. Fundamental oversupply expectations constrain upside: the IEA projects around 2.4 million bpd supply growth in 2026 versus roughly 860,000 bpd demand growth, creating a large projected surplus. Severe, sustained disruptions could drive stronger gains, but daily volatility will likely be driven by geopolitical headlines.
Read at London Business News | Londonlovesbusiness.com
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