Oil Prices Rise Amid Tensions Over US-Venezuela Relations

Oil prices experienced fluctuations before settling slightly higher following a turbulent trading session on December 1, 2023. The rise was initially spurred by media reports indicating that US air strikes on Venezuela could commence imminently. However, prices retreated after US President Donald Trump denied the claims via social media.

Market Movements and Key Prices

Brent crude futures closed at $65.07 per barrel, while West Texas Intermediate (WTI) crude finished at $60.98. Over the past week, Brent crude rose by 1.3%, contrasting with a 0.8% decline in WTI.

The United States has positioned a task force, centered around the aircraft carrier Gerald Ford, off the coast of Venezuela. This deployment exceeds what would typically be necessary for combating small-scale drug trafficking, which has been the primary focus of US naval operations in the Caribbean in recent weeks.

In related news, sources reported to Reuters that Saudi Arabia, the largest oil exporter globally, may lower its December crude prices for Asian buyers to their lowest levels in several months, suggesting a bearish sentiment in the market.

Natural Gas Prices Steady Amid Weak Demand

In the liquefied natural gas (LNG) sector, Asian spot prices remained stable last week, reflecting weak demand and healthy inventory levels in the region. The average LNG price for December delivery into northeast Asia was estimated at $11.10 per million British thermal units (mmBtu), down from $11.20 per mmBtu the previous week.

Market analysts predict that prices will stay steady due to lower gas-fired utilization and reduced industrial gas demand in China. Additionally, Japanese LNG inventories remain above average, with major electric utilities in Japan holding 1.97 million tons of LNG, up from 1.84 million tons at the end of October last year.

In Europe, the Dutch TTF price settled at $10.46 per mmBtu, marking a weekly decline of 3.8%.

The fluctuations in both oil and natural gas markets highlight ongoing geopolitical tensions and the influence of supply dynamics on global energy prices.