Oil prices rose for the second day in a row, as geopolitical risks stretching from Venezuela to Russia outweighed still-negative global supply forecasts.
Brent crude, the global benchmark, initially rose to around $61 a barrel, then pared some of its gains during the day, after US President Donald Trump refrained from addressing the latest developments in Venezuela during a speech from the White House. Meanwhile, West Texas Intermediate crude surpassed $56 a barrel.
Washington this week imposed a blockade on sanctioned oil tankers coming from Venezuela, as US President Donald Trump accused Caracas of seizing US energy rights.
Supply pressures and developments in Venezuela
Oil is on track for an annual loss amid concerns that global supply will outpace demand, after West Texas Intermediate crude hit its lowest level since 2021 earlier this week, before tensions provided some support for prices. Market indicators from the Middle East to the United States showed increasing signs of weakness.
Mukesh Sahdev, CEO of XAnalysts Pty, said: This is not the time to short sell, referring to betting on losses.
The United States is also preparing to impose a new round of sanctions on Russia's energy sector if President Vladimir Putin rejects a peace agreement with Ukraine. Options under consideration include increasing pressure on the so-called shadow fleet of oil tankers and the traders who facilitate exports.
In Venezuela, oil storage facilities and tankers docked at its ports are rapidly filling up, according to people familiar with the situation. If storage capacity reaches its limit, the state-owned oil company Petróleos de Venezuela (PDVSA), which produces nearly one million barrels per day, may be forced to shut down some wells.
In a televised address, President Nicolás Maduro said he spoke on Wednesday with UN Secretary-General António Guterres. He added: The United States is seeking regime change to impose a puppet government that wouldn't last 47 hours, surrender sovereignty and wealth, and turn Venezuela into a colony. This will never happen.
In the same vein, Chinese Foreign Minister Wang Yi expressed his country's support for Venezuela on Wednesday, criticizing what he called unilateral coercion, just hours after Trump issued the embargo order. The top Chinese diplomat told his Venezuelan counterpart, Ivan Gil, that Beijing opposes unilateral bullying, according to an official statement.
