WTI jumps to $57.50 as US intercepts Venezuela tanker

The US crude oil benchmark West Texas Intermediate is trading around $57.65 early on Monday, after President Trump he will not rule out war with Venezuela, raising fresh supply uncertainty.

Traders brace for the release of the American Petroleum Institute (API) crude oil stockpiles report on Tuesday for fresh impetus.

NBC reported on Sunday that the US is still in pursuit of a third oil tanker near Venezuela as Donald Trump intensifies an oil blockade on Nicolás Maduro’s government. Another official affirmed that the tanker was under sanctions, but reiterated that it had not yet been boarded and that interceptions may take several forms, including sailing or flying near vessels of concern.

“The market is waking up to the fact that the Trump administration is taking a hardline approach to the Venezuelan oil trade,” said June Goh, senior oil market analyst at Sparta Commodities.

On the other hand, the growing expectation that the Federal Reserve will deliver further interest rate cuts after signs of softer US inflation and cooler jobs reports could weigh on the US dollar and boost the USD-denominated commodity price.

Markets are pricing in a 21.0% odds the Fed will cut interest rates at its next meeting in January, after it reduced them by a quarter-point at each of its last three meetings, according to the CME FedWatch tool.

(Source: OANDA)