Oil prices rose slightly for the sixth consecutive day on Wednesday, supported by strong U.S. economic data, along with geopolitical tensions that contributed to price support.
The risks included the possibility of supply disruptions from Venezuela and Russia, however, prices are on track to record the largest annual loss since 2020.
Brent crude futures rose by 14 cents, or 0.2%, to $62.52 a barrel.
U.S. West Texas Intermediate crude rose by 23 cents, or 0.4%, to $58.61 a barrel.
Both crude oils gained about 6% since December 16, after falling to levels close to a five-year low.
IG analyst Tony Sycamore stated that recent market movements reflect position settlements in thinly traded markets, noting that the break of the downward trend last week did not last, while rising geopolitical tensions contributed to price support, including the U.S. blockade on Venezuela and strong GDP data.
U.S. data showed the economy grew at its fastest pace in two years in the third quarter, driven by strong consumer spending and a sharp rebound in exports.
Oil demand and annual losses
Brent and West Texas crude prices are still on track to record significant annual losses, with Brent expected to decline by about 16% and West Texas down by about 18%, marking the largest annual losses since 2020, when demand was devastated by the COVID-19 pandemic.
MUFG analyst Sujin Kim stated that oil is heading for the largest annual decline since 2020, noting that the expected supply may exceed demand despite supply risks.
Haitong Futures reported that the disruption of Venezuelan exports was the most significant factor supporting prices, along with the reciprocal attacks between Russia and Ukraine on energy infrastructure.
More than a dozen oil tankers loaded in Venezuela are waiting for new instructions from their owners after the U.S. seized the giant tanker 'Skipper' and targeted two additional tankers.
U.S. President Donald Trump last week announced the imposition of a 'blockade' on all sanctioned vessels, including those entering or leaving Venezuela, aimed at increasing pressure on Venezuelan President Nicolas Maduro.
Crude oil inventories
U.S. crude oil inventories rose by 2.39 million barrels last week, gasoline inventories increased by about 1.09 million barrels, and distillate stocks rose by 685,000 barrels, according to data from the American Petroleum Institute.
The U.S. Energy Information Administration is set to release the official inventory data on Monday, delayed from its usual schedule due to the Christmas holiday.