WASHINGTON (dpa-AFX) - Crude oil surged on Monday as U.S. dollar index suffered pressure from rate-cut expectations.
In addition, a brewing Latin American conflict after U.S. steps up action against Venezuela along with Ukraine's attacks on Russia last weekend that damaged a Russian oil terminal have heightened supply side concerns.
WTI Crude Oil for January delivery was last seen trading up by $0.75 (or 1.28%) at $59.30 per barrel.
Venezuelan President Nicolas Maduro accused the U.S. of scheming to seize the country's oil-rich reserves and requested the OPEC to protect his country from U.S. President Donald Trump's aggressive actions.
Notably, the Latin American nation holds world's largest oil reserves at around 300-plus billion barrels, according to a 2023 estimate.
On Saturday, Trump announced that the air space above and near Venezuela to be closed in its entirety.
Though Trump administration has been justifying its actions to curtail drug trafficking originating from Venezuela that affects the U.S., Venezuela, condemned it calling it a 'colonial threat' aimed at gaining access to the nation's rich oil wealth.
At its Sunday meeting, the OPEC+ alliance agreed again to hold the oil output levels unchanged for the first-quarter 2026. The cartel also approved a process to reassess production capabilities of its member-nations to calibrate future quotas.
As traders were anticipating OPEC would reaffirm its last month's decision to halt output, lingering oversupply concerns have reduced further.
Russia is finding alternate ways to sell its oil as U.S.-imposed sanctions on its exports has resulted in the nation losing enormous petrodollars.
Now, Russia has increased its discount steeply to maintain the trade.
Bloomberg reports that Indian state-owned refiners have resumed buying crude for January delivery from intermediaries (non-sanctioned) operating outside Western sanctions' orbit.
The Trump administration has been vigorously pushing a new peace plan to end the Russia-Ukraine conflict.
Top U.S. and Ukrainian officials held talks in Florida. Wrapping up the negotiations, U.S. Secretary of State Marco Rubio called the session as 'very productive' though he added that additional work was needed to complete the process and end the war.
While Russian troops are advancing into Ukraine, Ukraine has been targeting Russian oil and energy facilities increasing the frequency.
Last weekend, Ukraine attacks temporarily shut down export operations at the Caspian Pipeline Consortium terminal at the Russian Black Sea port of Novorossiysk which exports Kazakhstan's crude.
Concerns are increasing about the retaliation from Russian side which could target Ukraine-bound shipments in the Black Sea which could hurt supply.
In the U.S., Kevin Hassett - a rate-cut votary - is speculated to become the next Federal Reserve Chair when the current Chair's term ends.
Markets are already pricing in another interest lowering by the Fed in its upcoming monetary policy meeting.
Traders predict that slowing demand growth, as forecast by several agencies, as well as oversupply due to the return of sanctioned Russian oil barrels once the peace plan is activated could act as headwind to oil prices in the near term.
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