West Texas Intermediate (WTI) crude oil prices extend their advance on Friday, trading near the $57.70 mark during European hours. The move higher reflects renewed concerns over global supply, driven largely by escalating geopolitical tensions and fresh signals of tightening inventories in the United States. Market participation remains relatively thin, but underlying sentiment has turned cautiously supportive for crude prices.
Tensions between Russia and Ukraine continue to weigh on the supply outlook. Kyiv has intensified strikes on Russian energy infrastructure in recent months, aiming to undermine Moscow’s ability to finance its military operations.
At the same time, Russia and Ukraine have exchanged accusations of attacks on civilian targets on New Year’s Day, underscoring the fragility of the situation despite ongoing US-led diplomatic efforts under President Donald Trump to end the nearly four-year conflict.
Sanctions and inventories reinforce bullish undertone
Adding to supply-side uncertainty, the US Treasury Department announced new sanctions on Wednesday targeting several vessels accused of transporting Venezuelan crude and fuel in violation of existing restrictions.
According to Reuters, the Panama-flagged Nord Star, Guinea-flagged Lunar Tide, and Hong Kong-flagged Della, along with four additional tankers linked to a so-called shadow fleet, were sanctioned for helping President Nicolás Maduro’s government bypass US measures by shipping oil to Asia and the Caribbean.
These actions have reportedly prevented sanctioned vessels from entering or leaving Venezuela, forcing state-owned oil company PDVSA to take extraordinary measures to avoid refinery shutdowns as residual fuel inventories accumulate.
On the demand and inventory front, US crude stockpiles provided further support to prices. Data released by the US Energy Information Administration (EIA) on Wednesday showed a drawdown of 1.934 million barrels last week, the largest decline since mid-November and significantly above market expectations for a 0.9 million-barrel decrease.
OPEC+ meeting in focus
Looking ahead, traders are turning their attention to the upcoming virtual meeting of the Organization of the Petroleum Exporting Countries and its allies (OPEC+), scheduled for Sunday. Market expectations suggest the group will reaffirm its November decision to pause further production increases, a stance that could help maintain a relatively tight supply backdrop and keep crude prices supported in the near term.
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