WASHINGTON (dpa-AFX) - Crude oil catapulted on Monday, reversing the previous session's losses, with the Russia-Ukraine attacks continuing despite U.S. efforts to end the war, the U.S.-Venezuela conflict escalating, and fresh conflicts brewing in the Middle East, all increasing supply concerns.
WTI Crude Oil for February delivery was last seen trading up by $1.25 (or 2.20%) at $57.99 per barrel.
In his ongoing efforts to end the Russia-Ukraine war, U.S. President Donald Trump had a lengthy phone call with Russian President Vladimir Putin and later called the talks as 'productive.'
Following the call, Trump hosted Ukrainian President Volodymyr Zelenskyy at his residence in Florida to understand Ukraine's concerns in the new peace draft.
After the talks, Trump commented, 'we are getting close,' which raised the expectations of a ceasefire.
However, the optimism that surfaced due to the diplomatic efforts by Trump faded as Russia and Ukraine continued with their attacks on energy reserves.
In South America, the U.S. has ramped up its military intervention against Venezuela.
After accusing Nicolas Maduro's regime of promoting illegal narco-trade and human-trafficking, so far, the U.S. has struck around 30 boats in the Caribbean Sea and the eastern Pacific Ocean.
Recently, Trump ordered a total 'naval blockade' of sanctioned oil tankers arriving to and leaving from Venezuelan ports.
The U.S. military captured two big oil tankers linked to Venezuela and Trump announced that the U.S. may keep the oi for its strategic reserves or else sell in on the open market.
In an interview with WABC, Trump claimed that the U.S. had taken out a 'big facility' in Venezuela and 'knocked that out' without providing further details.
So far, China and Russia, the political allies of Venezuela, have not interfered aside from condemning the U.S.
In an emerging crisis in the Middle East, Saudi Arabia reportedly launched airstrikes in Yemen targeting the Southern Transitional Council (STC) militant group, which has the backing of the United Arab Emirates.
The STC moved to seize Hadhramaut and the eastern province of al-Mahra in Yemen. These two regions contain Yemen's largest oil fields.
The attempts by the STC separatists pushing for an independent state of Southern Yemen was not well-received by Saudi Arabia.
To support the official Yemeni government, Saudi Arabia conducted air strikes in the Wadi Nahb, Hadhramaut. Officially though, Saudi Arabia denied conducting any aerial attacks.
Ahead of Trump's meeting with Israeli Prime Minister Benjamin Netanyahu, outlining the effects of the actions of the U.S. and Israel on the Iranian economy, Iran's President Masoud Pezeshkian has announced that Iran has engaged in an unprecedented 'all-out war' with the U.S. Europe, and Israel. The Trump administration has yet to officially respond to the threats.
On the inventory front, the International Energy Agency has forecast that in 2026, the world will produce an extra 3.84 million barrels per day (roughly 4% of global demand) than it consumes.
OPEC+ has boosted its output in 2025 and has paused the increases for early 2026. However, the alliance presented a different perspective, stating that supply and demand will be almost in sync over the next year.
China, the world's second-largest consumer of crude oil has been stockpiling its reserves in large-scale since April. Though no official data from China is available, it is estimated to be approximately 500,000 bpd.
According to Kpler numbers, seaborne crude oil inventory (stored in tankers or transported) has increased to the highest level since April 2020.
On the monetary front, investors are betting on a 16.1% chance of a quarter-point rate cut at the U.S. Federal Reserve's January 27-28 meeting, according to CME Group's FedWatch Tool.
The Fed's rate cut decision and its consequential effect on the U.S. dollar could impact oil prices as crude oil is a dollar-denominated commodity.
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