Oil prices saw limited gains on Wednesday amid supply concerns stemming from heightened tensions between the US and Venezuela, as well as stronger-than-expected US economic growth data.
International benchmark Brent crude was trading at $61.97 per barrel at 09.50 a.m. local time (0650 GMT), up 0.01% from the previous close of $61.96.
US benchmark West Texas Intermediate (WTI) also increased by 0.01% to $58.40, compared to $58.39 in the prior session.
Venezuelan President Nicolas Maduro said his country has received "overwhelming support" at the UN Security Council following US seizures of Venezuelan oil tankers.
US President Donald Trump on Dec. 16 ordered a "total and complete blockade" on all sanctioned oil tankers entering or leaving Venezuela, citing allegations that the country is financing narcotics-related terrorism.
While Venezuela accounts for a relatively small share of global oil supply, analysts say markets remain highly sensitive to any potential supply disruptions amid broader geopolitical risks, providing support to prices.
Strong US growth data also lent support to prices. According to preliminary figures, the US economy expanded at an annualized rate of 4.3% in the third quarter, exceeding expectations and marking the fastest pace of growth since the third quarter of 2023. Industrial production rose 0.2% in November after a 0.1% decline the previous month.
The stronger-than-expected growth has helped ease concerns over an economic slowdown by signaling resilient consumer spending and economic activity in the world’s largest oil consumer.
Meanwhile, as the process to select a new Federal Reserve (Fed) chair continues, US President Donald Trump argued that the newly released "great" economic data was the result of tariffs, adding that the figures would improve further and claiming there was no inflation. Moreover, referring to the next Fed chair, Trump said, "Anybody that disagrees with me will never be the Fed Chairman!"
While the remarks have reinforced expectations of interest rate cuts, they have also raised questions over rising political pressure on the Fed in the period ahead. The comments have strengthened concerns that such pressure could undermine the central bank's institutional independence and credibility.
In money markets, traders are pricing in an 86% probability that the Fed will keep interest rates unchanged in January, while expectations point to a total of two rate cuts over the course of the year.
Comments from Trump have reinforced expectations that the Bank might adopt a more accommodative policy stance, which typically supports oil prices by weakening the dollar and improving risk appetite. However, concerns that rising political pressure could undermine the Fed's independence are adding uncertainty to the outlook, limiting the extent of gains in crude.
On the other hand, expectations of rising US crude inventories have weighed on prices. The American Petroleum Institute estimated that commercial crude stocks rose by 2.4 million barrels last week, compared with market expectations for a draw of 9.3 million barrels.
The surprise build has reinforced perceptions of weaker demand in the US, pressuring prices.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr
