Dec 2 (Reuters) – Oil prices held firm in early trading on Tuesday as market participants assessed risks stemming from Ukrainian drone strikes on Russian energy sites, mounting U.S.-Venezuela tensions and mixed expectations for U.S. fuel inventories.
Brent crude futures rose 7 cents, or 0.1%, to $63.24 a barrel at 0427 GMT. U.S. West Texas Intermediate crude gained 10 cents, or 0.2%, to $59.42 a barrel.
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Both benchmarks advanced more than 1% on Monday, while WTI was near a two-week high.
“Oil held gains as traders awaited President Trump’s moves on Venezuela and assessed Black Sea terminal damage,” Saxo analysts said in a note to clients.
“The military action further supports our opinion that a peace deal is highly unlikely anytime soon and that the diesel/gasoil markets are on the cusp of pulling the complex back up,” analysts at Ritterbusch and Associates said in a note.
U.S. envoy Steve Witkoff is due to brief the Kremlin on Tuesday.
DBS energy sector team lead Suvro Sarkar said “the only other emerging factor” for oil was “the noise around Venezuela.”
“While a full-blown conflict is unlikely, ongoing events could destabilise the country internally and threaten oil production and exports,” he said.
“The OPEC+ language on supply management and discipline in the near term remains supportive for oil prices,” said DBS Bank’s Sarkar.
Mixed outlooks on U.S. crude and refined products inventory data weighed slightly on prices, with a Reuters preliminary poll among four analysts showing crude inventories falling but product inventories rising in the week of November 28.
Reporting by Ashitha Shivaprasad in Bengaluru and Trixie Yap in Singapore; Editing by Sonali Paul and Thomas Derpinghaus
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