(RTTNews) – Crude oil prices remained almost flat on Wednesday amid prevailing geopolitical risks due to the ongoing US-Venezuela conflict, while signs of a Russia-Ukraine ceasefire surface.
WTI crude oil for February delivery was last seen trading up $0.02 (or 0.03%) at $58.40 a barrel.
The long-running Russia-Ukraine war appeared to show some signs of ending soon after Ukrainian President Zelensky outlined a new 20-point peace plan jointly drafted by US and Ukrainian officials during their meeting in Florida over the weekend.
The framework allows for complementary bilateral deals between the US and Ukraine that will ensure security guarantees to Ukraine and protect the country from future foreign attacks. The deal also includes a huge development package to rehabilitate the war-torn nation.
Zelensky said the proposal has been sent to Russia for review. Russia is expected to respond after analyzing all the principles of the draft.
Despite ongoing diplomatic efforts to end the war, Russia fired more than 650 drones and more than 30 missiles into Ukraine in an overnight attack. Zelensky has warned that Russia may intensify attacks after the Christmas holidays.
After accusing the regime of Nicolas Maduro in Venezuela of promoting illegal narco-trafficking, which has led to the opioid crisis in the US, US President Donald Trump ordered a “naval blockade” of all sanctioned oil vessels entering and exiting Venezuela.
After this, the US Army captured two big oil tankers named Skipper and Centuries belonging to Venezuela.
Trump announced that the US would either keep the oil to replenish its strategic reserves or sell it on the market. He also announced that America would sell this ship.
Currently, the US Coast Guard is searching for the third ship (Bella 1) in international waters off Venezuela.
Maduro, who has denied Trump’s allegations, countered that the US was actually plotting to get its hands on Venezuela’s rich oil reserves under false accusations and called for immediate UN intervention.
Yesterday, the UN Security Council held an emergency meeting to discuss the conflict, where a majority of members advised the US to exercise restraint and avoid further escalation.
In particular, the major powers, Russia and China, currently stand with Venezuela. Both countries have condemned American actions and Trump’s rhetoric.
Since China is a major buyer of Venezuelan oil, concerns arise that any direct intervention by China could escalate into a new crisis.
The supply side picture is mixed as the Energy Information Administration raised its 2025 crude oil production forecast to 13.61 million barrels per day and cut 2026 output to 13.53 bpd, while the International Energy Agency cut its 2026 surplus estimate to 3.84 million bpd.
Data from the American Petroleum Institute showed that US crude oil inventories increased by 2.4 million barrels for the week ended December 19, the first increase after a four-week draw. Crude oil inventories had declined by 9.3 million barrels last week.
In the US, despite several Federal Reserve officials expressing contrary views on the need for interest rate cuts, hopes for another cut are still alive, bolstered by Trump’s call for a low interest rate regime.
CME Group’s FedWatch tool is currently indicating a 13.3% chance of the Fed cutting rates at its upcoming January 27-28 meeting.
Traditionally, the days between Christmas and New Year are inactive for oil traders as liquidity decreases.
Experts believe that developments in the geopolitical landscape as well as the interest rate decision by the Fed (which could impact the US dollar) will determine the trajectory of oil prices in the near term.
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