Oil edges down as investors assess oversupply, geopolitics
A view shows a pressure gauge near oil pump jacks outside Almetyevsk, in the Republic of Tatarstan, Russia July 14, 2025. REUTERS/Stringer
LONDON, Dec 2 : Oil prices fell slightly on Tuesday as traders weighed up risks from Ukrainian drone strikes on Russian energy sites and concerns about oversupply.
Brent crude futures fell 38 cents, or 0.6 per cent, to $62.79 a barrel by 1420 GMT. U.S. West Texas Intermediate crude was down 36 cents, or 0.6 per cent, to stand at $58.96 a barrel.
Both benchmarks advanced more than 1 per cent on Monday, while WTI was near a two-week high.
"The latest goings-on in the oversupplied global picture putting pressure on prices have been balanced by hits on Russian infrastructure that accelerated through the weekend, as well as bubbling tensions between U.S.-Venezuela," said Rystad analyst Janiv Shah.
"Geopolitical risk premiums have gained in the last few sessions as Russian-flagged vessels have also been targeted."
On Monday, the Caspian Pipeline Consortium said it had resumed oil shipments from one mooring point at its Black Sea terminal following a major Ukrainian drone attack on November 29.
Additionally, U.S. President Donald Trump said on Saturday "the airspace above and surrounding Venezuela" should be considered closed, sparking fresh uncertainty in the oil market, as the South American nation is a major producer.
"Focus is also on the Ukrainian peace talks, which might result in Russia increasing its crude oil and product exports once again, although this process is likely to be protracted," said Tamas Varga, an analyst at PVM Oil Associates.
On the negotiation front, Trump's special envoy, Steve Witkoff, and son-in-law Jared Kushner will meet Russian President Vladimir Putin on Tuesday for talks on a possible way to end the war.
Prices came under pressure in recent months because of concerns about a potential oversupply in coming months, as OPEC+ members increased production.
Against this backdrop, OPEC+ agreed to leave oil output levels unchanged for the first quarter of 2026 at its meetings on Sunday as the group slows down its push to regain market share amid fears of a looming supply glut.
