By Jeslyn Lerh SINGAPORE, Dec 11 (Reuters) – Oil prices eased on Thursday as investors shifted focus back to Russia-Ukraine peace talks and monitored potential fallout from a U.S. seizure of a sanctioned tanker off the coast of Venezuela. Brent crude futures were down 50 cents, or 0.8%, at $61.71 a barrel, as of 0730 […]
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Oil retreats as investor focus returns to Ukraine peace talks
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By Jeslyn Lerh
SINGAPORE, Dec 11 (Reuters) – Oil prices eased on Thursday as investors shifted focus back to Russia-Ukraine peace talks and monitored potential fallout from a U.S. seizure of a sanctioned tanker off the coast of Venezuela.
Brent crude futures were down 50 cents, or 0.8%, at $61.71 a barrel, as of 0730 GMT, while U.S. West Texas Intermediate crude fell 46 cents, or 0.8%, to $58.00 a barrel.
The benchmarks settled higher a day earlier after the U.S. said it seized an oil tanker off the coast of Venezuela, as escalating tensions between the two countries raised concerns about supply disruptions.
“So far, the seizure has not trickled down to the market, but further escalation will impose heavy crude price volatility,” said Emril Jamil, a senior oil analyst at LSEG.
“The market remains in limbo, eyeing the Russian-Ukraine peace deal progress.”
On Wednesday, U.S. President Donald Trump said “we’ve just seized a tanker on the coast of Venezuela, large tanker, very large, largest one ever, actually, and other things are happening.”
Trump administration officials did not name the vessel. British maritime risk management group Vanguard said the tanker, Skipper, was believed to have been seized off Venezuela.
Traders and industry sources said Asian buyers are demanding steep discounts on Venezuelan crude, pressured by a surge of sanctioned oil from Russia and Iran and heightened loading risks in the South American country as the U.S. boosts its military presence in the Caribbean.
Investors were more focused on developments in Russia-Ukraine peace talks. The leaders of Britain, France and Germany held a call with Trump to discuss Washington’s latest peace efforts to end the war in Ukraine, in what they said was a “critical moment” in the process.
Reports of Ukraine striking a vessel from Russia’s shadow fleet lent support to prices for now, IG market analyst Tony Sycamore said in a note.
“These developments are likely to keep crude oil above our key $55 support level into year-end, barring an unexpected peace deal in Ukraine,” Sycamore said.
In other news, a sharply divided Federal Reserve reduced its benchmark interest rate. Lower rates can reduce consumer borrowing costs and boost economic growth and oil demand.
Meanwhile, a drawdown in U.S. crude inventories also lent support to prices even though the drop was milder than expected.
Crude inventories fell by 1.8 million barrels to 425.7 million barrels in the week ended December 5, the Energy Information Administration said in its weekly Petroleum Status Report, compared with analysts’ expectations in a Reuters poll for a draw of 2.3 million barrels.
(Reporting by Ashitha Shivaprasad in Bengaluru and Jeslyn Lerh in Singapore; Editing by Tom Hogue, Thomas Derpinghaus and Sherry Jacob-Phillips)