Recap: The crude oil market on Thursday traded lower after the market saw no immediate fallout from the U.S. seizure of a sanctioned oil tanker off the coast of Venezuela. The market shifted its focus back on the Russia-Ukraine peace talks after Russia’s Foreign Minister said the visit to Moscow by U.S. envoys Steve Witkoff and Jared Kushner had resolved misunderstanding between the two countries, while the leaders of Britain, France and Germany held a call with President Trump to discuss Washington’s latest peace efforts to end the war in Ukraine. The oil market posted a high of $58.94 on the opening and erased its previous gains as it sold off to a low of $57.01 by mid-day. The market later retraced some of its losses on news of the U.S. issuing new Venezuela related sanctions, including adding six crude oil tankers to its sanctions list. The January WTI contract settled down 86 cents at $57.60 and the Brent contract settled down 93 cents at $61.28. The product markets ended the session in negative territory, with the heating oil market settling down 4.41 cents at $2.2289 and the RB market setting down 2.17 cents at $1.7598.
Technical Analysis: The oil market will likely trade sideways on Friday as the market weighs the increased pressure on Venezuela against some movement on a possible path to peace between Russia and Ukraine. The market will remain headline driven. The market is seen finding support at $57.01, $56.33 and $55.99. Meanwhile, resistance is seen at $58.34, $58.75, $58.94, $59.05, $59.17 followed by $60.30 and $60.50.
Fundamental News: Axios reported that the U.S. imposed new sanctions on Thursday on three nephews of Venezuelan President Nicolas Maduro and six companies shipping the country’s oil.
On Wednesday, U.S. President Donald Trump said the U.S. has seized a sanctioned oil tanker off the coast of Venezuela. In response, the Venezuelan government in a statement accused the U.S. of “blatant theft” and described the seizure as “an act of international piracy”. It said it would denounce the incident before international bodies. The seizure is the first of a Venezuelan oil cargo amid U.S. sanctions that have been in force since 2019. It is also the Trump administration’s first known action against a Venezuela-related tanker since President Trump ordered a massive military buildup in the region. The U.S. has already carried out several strikes against suspected drug vessels, which has raised concerns among lawmakers and legal experts. British maritime risk management group Vanguard said the very large crude carrier, Skipper, was believed to have been seized off Venezuela early on Wednesday. The U.S. has imposed sanctions on the tanker for what it says was involvement in Iranian oil trading when the vessel was called the Adisa. The Skipper left Venezuela’s main oil port of Jose between December 4th and 5th after loading some 1.8 million barrels of Venezuela’s Merey heavy crude. According to satellite information analyzed by TankerTrackers.com and internal data from PDVSA, the tanker transferred about 200,000 barrels near Curacao to the Panama-flagged Neptune 6 bound for Cuba before the seizure. On Thursday, White House spokeswoman Karoline Leavitt said the U.S.-seized oil vessel linked to Venezuela is expected to sail to a U.S. port, where the government intends to seize its cargo of oil through a formal legal process.
Separately, sources stated that the U.S. is preparing to intercept more ships transporting Venezuelan oil following the seizure of a tanker this week. Further direct interventions by the U.S. are expected in the coming weeks targeting ships carrying Venezuelan oil that may also have transported oil from other countries targeted by U.S. sanctions, such as Iran. The sources stated that the U.S. has assembled a target list of several more sanctioned tankers for possible seizure.
The White House said U.S. President Donald Trump will send a representative to talks in Europe on Ukraine this weekend if there is a real chance of signing a peace agreement.
Early Market Call – as of 8:30 AM EDT
WTI – Jan $57.55, down 37 cents
RBOB – Jan $1.7571, down 90 points
HO – Jan $2.2127, down 3.15 cents
