Quick overview

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Oil prices increased as President Donald Trump stepped up his blockade of Venezuela, with US forces boarding one tanker and pursuing another within weeks of first seizing a vessel.
Brent rose to about $61 per barrel after two weekly drops, while West Texas Intermediate was close to $57 a barrel.

The US Coast Guard boarded the Centuries tanker, which was carrying two million barrels of Venezuelan crude, in the Caribbean.

It is also pursuing the Bella 1, which is traveling to a country in Latin America. Trump wants to cut off Nicolás Maduro’s government’s main source of income, so Washington has been increasing pressure on it. The US also accused the regime of involvement in drug trafficking and designated it as a foreign terrorist organization.

Although Venezuela still has the largest crude reserves in the world, its exports, most is exported to China, make up less than 1% of the world’s total demand.
Tensions over supplies from another OPEC+ member also increased after Ukraine used drones for the first time to strike an oil tanker from Russia’s shadow fleet in the Mediterranean Sea. That came after attacks on Caspian Sea facilities owned by Lukoil PJSC. Oil prices have decreased by roughly a fifth this year, in part due to the geopolitical situation.

The Organization of the Petroleum Exporting Countries and its allies restored production more quickly than anticipated, but producers outside the cartel continued to pump more, causing the declines. Robert Rennie, head of commodity research at Westpac Banking Corp., stated, “We stick to our slightly more upbeat view on crude through the end of the year based on geopolitical developments being much more supportive.”  Brent will likely fall into the $50s next year.