In a development reflecting the rising geopolitical tensions, oil prices increased for the second consecutive day on Thursday, supported by concerns over disruptions in global supply chains. This rise came after the United States seized an oil tanker subject to sanctions near the shores of Venezuela, raising questions about the impact on global markets. Brent crude rose by 27 cents to $62.48 per barrel, while West Texas Intermediate crude increased by 33 cents to $58.79. This increase is attributed to a series of geopolitical and economic events that enhance demand and elevate supply risks.
According to analyst Tony Sycamore from IG, West Texas crude continues to rise after the news of the tanker seizure, noting that reports of Ukraine targeting a ship from the 'shadow fleet' of Russia contributed to supporting prices. He added that these developments could keep oil prices above the key support level of $55 until the end of the year, unless a surprise peace agreement occurs in Ukraine. Additionally, the increased flow of sanctioned oil from Russia and Iran has driven buyers in Asia to request significant discounts on Venezuelan oil, due to operational risks in Venezuelan ports and the bolstering of US military presence in the Caribbean.
Among the notable events, US President Donald Trump announced the seizure of a massive oil tanker off the coast of Venezuela, describing it as 'the largest ever,' with hints at 'other things happening.' The tanker in question is believed to be the 'Skipper,' according to the British maritime risk management company Vanguard. In a related context, Ukrainian maritime drones struck a tanker linked to Russian oil trade in the Black Sea, disrupting the vessel within the Ukrainian economic zone. This incident heightened tensions, especially as investors monitored peace talks in Ukraine, where leaders of Britain, France, and Germany contacted Trump to discuss Washington's efforts to end the war, describing the process as reaching a 'critical moment.'
On the economic front, the US Federal Reserve's cut in interest rates amid a sharp division within the board has contributed to the rise. This cut reduces the cost of borrowing, supporting economic growth and increasing demand for oil. However, the market remains sensitive to any positive developments in international negotiations, which may ease price pressures.
Key points:
- Today's prices: Brent at $62.48 (+27 cents), West Texas at $58.79 (+33 cents).
- Geopolitical reasons: seizure of a Venezuelan tanker, strike on a Russian tanker in the Black Sea, peace talks in Ukraine.
- Economic impacts: US rate cut boosts demand; concerns over supply disruptions.
- Forecast: prices above $55 until the end of the year, unless progress is made in peace talks.
These developments highlight the vulnerability of energy markets to international tensions, with recommendations for traders to focus on support and resistance levels amid current volatility.
