Crude Oil Prices Recover as US Seizes a Tanker Off the Coast of Venezuela

Core Insights - Crude oil and gasoline prices have experienced significant declines, with crude reaching a 2-week low and gasoline hitting a 4.75-year low in nearest-futures [2] - The seizure of a sanctioned oil tanker by US forces off the coast of Venezuela has led to a rally in crude prices, as it may hinder Venezuela's oil export capabilities [2][6] - Concerns about a global oil glut are prevalent, with Trafigura predicting a "super glut" in the coming year due to new supply outpacing sluggish demand [4] Price Movements - January WTI crude oil closed up by $0.21 (+0.36%), while January RBOB gasoline closed down by $0.0082 (-0.46%) [1] - The weekly EIA inventory report showed mixed results, with crude supplies falling more than expected, while gasoline and distillate stockpiles rose more than anticipated [3] Supply Dynamics - Saudi Aramco's decision to cut the price of Arab Light crude oil for Asian customers by $0.30 per barrel for January delivery indicates weaker energy demand [5] - Russian crude exports have decreased significantly, with shipments falling to 1.7 million barrels per day (bpd) in early November, the lowest in over three years [7] - New US and EU sanctions on Russian oil companies and infrastructure are further limiting Russia's crude export capabilities [7] Geopolitical Factors - Geopolitical tensions are influencing crude prices, with threats from Russian President Putin regarding attacks on ships aiding Ukraine and recent drone attacks on Russian tankers [6] - The US has indicated potential military actions in Venezuela, which could impact the global oil supply given Venezuela's status as the 12th-largest oil producer [6]