Oil holds gains amid traders gauge geopolitics against inventories

Oil held the bulk of its gain on the back of traders gauging geopolitical tensions from Russia to Venezuela and Iran against concerns regarding a glut.

The West Texas Intermediate was near $58 a barrel after increasing 2.4% on Monday. On the other hand, Brent settled under $62.

Venezuela began to shut wells in a region holding the world's largest deposits in the face of a US blockade. Separately, President Donald Trump said the US struck a facility inside the country.

That came as Trump’s renewed push to end the war in Ukraine faced new obstacles after Russian President Vladimir Putin said he would revise his negotiating position after alleged drone attacks on his residence. Meanwhile, the US leader vowed to strike Iran again if it rebuilt its nuclear programme.

Crude remains on course for a steep annual drop on concern global production will eclipse demand after OPEC+ ramped up output in a bid to recapture market share. Among signs of abundant supplies, the amount of oil held around the world on tankers that have been stationary for at least seven days surged 15% last week, according to Vortexa Ltd. That lifted the total toward a peak seen last November that was the highest since 2020.

In the US, government data showed that crude stockpiles at the key Cushing, Oklahoma, hub saw the biggest weekly build since late October in the period to December 19. On a nationwide basis, holdings of gasoline and distillates also rose. The release was delayed from last week due to the Christmas holiday.

With inputs from Bloomberg

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