Oil prices held firm on Tuesday as traders weighed up risks from Ukrainian drone strikes on Russian energy sites and mounting U.S.-Venezuela tension.

Brent crude futures BRN1! fell 19 cents, or 0.3%, to $62.98 a barrel by 0903 GMT. U.S. West Texas Intermediate crude CL1! was down 12 cents, or 0.2%, to stand at $20 a barrel.

Both benchmarks advanced more than 1% on Monday, while WTI was near a two-week high.

While prompt prices seemed rangebound, the geopolitical risk premium seems to have built again due to the situations around the Black Sea and Venezuela, said Ole Hansen, head of commodity strategy at Saxo Bank.

“Besides that, the expected yet elusive supply glut remains a key focus preventing any meaningful bounce at this point.”

On Monday, the Caspian Pipeline Consortium said it had resumed oil shipments from one mooring point at its Black Sea terminal following a major Ukrainian drone attack on November 29.

Additionally, U.S. President Donald Trump said on Saturday “the airspace above and surrounding Venezuela” should be considered closed, sparking fresh uncertainty in the oil market, as the South American nation is a major producer.

“Focus is also on the Ukrainian peace talks, which might result in Russia increasing its crude oil and product exports once again, although this process is likely to be protracted,” said Tamas Varga, an analyst at PVM Oil Associates.

On the negotiation front, Ukrainian President Volodymyr Zelenskiy said on Monday that Kyiv’s priorities were to maintain sovereignty and ensure strong security guarantees, adding that territorial disputes remained the most complicated sticking point.

On Sunday, OPEC+ reaffirmed a small oil output increase for December and a pause in increases in the first quarter of next year due to rising fears of a supply glut.
Source: Reuters