Oil rises as US escalates pressure on Venezuelan exports
The WTI prompt-month contract gained $1.30 to $57.82/Bbl in early Monday trading (7:45 AM CT)
Crude prices moved higher after the Trump administration intensified its enforcement actions against Venezuelan oil shipments, including recent tanker boardings and interdictions
US Coast Guard forces boarded the Centuries in the Caribbean over the weekend, a non-sanctioned tanker carrying roughly 2 MMBbls of Venezuelan crude
Ownership of the cargo reportedly traced back to a Chinese buyer, signaling Washington’s willingness to enforce restrictions even at the risk of broader geopolitical fallout
US authorities were also tracking the Bella 1, which was en route to Venezuela
While the Bella 1 was not carrying crude, its interception underscores US intent to target vessels suspected of preparing to load Venezuelan oil
The US has continued to ratchet up pressure on the Maduro government, aiming to choke off oil-related revenue streams while formally designating the regime as a foreign terrorist organization
Multiple supertankers previously bound for Venezuela have reportedly altered course following recent US enforcement actions in Caribbean waters
Despite holding the world’s largest proved crude reserves, Venezuela’s current export volumes, largely destined for China, now represent less than 1% of global oil demand
Venezuela may be forced to shut in production as storage capacity tightens amid tanker seizures and expanded efforts to block outbound shipments
Crude storage at key terminals, along with floating storage offshore, is rapidly filling and could reach operational limits within a week if export disruptions persist
Natural gas is lower, as prices continue to trade around $4/MMbtu
The January contract is extending losses from last week, currently trading below $4/MMbtu, but briefly traded as high as $4.14/MMbtu overnight (8:15)
Weather forecasts shifted significantly colder compared to Friday, with Lower-48 average temperatures expected to fall below the ten-year average around the end of December, after the current warm period ends
Gas production nearly set a record over the weekend, with data from S&P showing output at 109.5 Bcf/d yesterday
Producers may focus more on gas wells (S&P)
According to the recent Dallas Fed survey, smaller oil and gas producers may drill more gas-heavy wells over the next 12 months, as sentiment on long-term gas prices improves
Larger producers are less focused on gas, with only one-third expecting to go after wells with a higher gas content in 2026, compared with more than half of small producers
Producers polled in the survey have become more bullish on Henry Hub compared to prior surveys, but some remarked that low in-basin pricing is weighing on the outlook
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