Holiday Markets Eye War Risks but Oil Refuses to Break Out

Group 1: Venezuela Oil Production - Venezuela's state oil company PDVSA is beginning to shut down wells in the Orinoco Belt due to the impact of Donald Trump's maximum pressure strategy, which has led to swelling inventories and ongoing tanker seizures [3] - PDVSA plans to reduce output in the Orinoco Belt by at least 25% to 500,000 barrels per day (b/d), which could reduce Venezuela's total liquids production by approximately 15% [4] - Venezuela's oil production had been growing, with a November average of 1.165 million b/d representing a 20% year-over-year increase [3] Group 2: Market Movements - Woodside Energy signed a 9-year LNG supply deal starting from 2030 to deliver around 5.8 billion cubic meters of liquefied gas from its Louisiana LNG project [6] - Chevron has reported first oil from its South N'dola project offshore Angola, aiming for a peak output of 25,000 b/d of crude and 50 million cubic feet per day of natural gas [6] - Russia's government has extended the deadline for ExxonMobil to sell its 30% stake in the Sakhalin-I project by another year, indicating a potential re-integration of the US oil major into the new shareholding structure post-conflict [7] Group 3: Geopolitical Influences - Ongoing geopolitical tensions, including the Russia-Ukraine conflict, are affecting oil prices, with ICE Brent capped at $62 per barrel amid stalled peace talks [9] - An all-out war in Yemen could introduce new geopolitical risks to oil, although the physical impact remains uncertain [9] Group 4: Saudi Arabia's Pricing Strategy - Saudi Aramco is expected to cut its formula prices for February-loading cargoes to Asia by up to 30 cents per barrel, continuing to lower prices despite having reached a 5-year low last month [10]