Oil prices edge up as US-Venezuela tensions spark supply worries
Oil prices ticked up 0.4% on Monday after last week's slump, with Brent at $61.37 and WTI at $57.67 per barrel.
The main reason? People are worried about possible supply hiccups as things heat up between the US and Venezuela—even though there's still plenty of oil out there and Russia-Ukraine peace talks are ongoing.
US sanctions shake up Venezuelan oil flow
Last week, the US slapped sanctions on six shipping companies for moving oil that funds President Maduro's government.
The US also seized a tanker accused of smuggling Venezuelan oil (and previously sanctioned for Iranian oil shipments), raising fears that getting Venezuelan oil to market could get even trickier.
Global supply jitters: China deals and Ukraine strikes
Most of Venezuela's oil—about 80%—heads to China at discounted rates, so any disruption matters globally.
Plus, Ukraine just hit a Russian refinery, stopping production and adding more uncertainty to the world's oil supply.
What's next for prices?
US oil rigs have been cut for the second time in three weeks, hinting at less future production.
Some analysts think if these risks calm down, WTI prices could dip below $55 early next year.
As economist Tsuyoshi Ueno notes, while peace talks between Russia and Ukraine have swung between optimism and caution, tensions between Venezuela and the US are escalating, raising concerns about potential supply disruptions.