NEWS

 December 26, as investors assessed a potential supply glut and a lower war risk premium, amid hopes for a peace agreement in Ukraine early next week between Ukrainian President Volodymyr Zelensky and his US counterpart, Donald Trump.

Brent crude futures fell $1.60, or 2.57%, to settle at $60.64 a barrel.

US West Texas Intermediate crude futures dropped $1.61, or 2.76%, to settle at $56.74 a barrel.

Oil prices are on track for their biggest annual decline since 2020, despite supply disruptions helping to push prices back up in recent sessions from near five-year lows hit on December 16.

Brent crude has fallen 18% and U.S. crude 20% this year, as rising crude oil production has fueled concerns about a supply glut next year.

This coincided with a slight rise in the value of the dollar, with its index, which measures its value against a basket of major currencies, rising 0.10% to 98.035.

Oil prices are on track for their biggest annual decline since 2020 amid concerns about a market surplus as the new year approaches, driven by increased production from the OPEC+ alliance and non-OPEC countries.

Early this morning, the United States launched airstrikes against what it called "terrorist militias" in northern Nigeria, at the request of the government. Although most of the oil fields are located in the south of the country, the raids threaten to escalate geopolitical risks.

This comes as Washington intensifies its campaign against drug trafficking in the Caribbean, amid growing threats of ground operations inside Venezuela.

“The Nigerian strikes, which Trump praised, are targeting the Islamic State and are not directly impacting any crude oil pipelines or ports,” said June Goh, senior oil market analyst at Sparta Commodities. “As a result, traders are remaining on the sidelines.”

Nigeria, a major oil producer, has its oil fields and export infrastructure primarily located in the south of the country.

The White House has tasked the U.S. military with focusing on “enforcing a blockade” on Venezuelan oil for at least the next two months, indicating that Washington is currently prioritizing economic rather than military means to pressure Caracas.

“Due to the Christmas holiday closure, year-end market activity remains relatively subdued,” said Tong Chuan, an analyst at Galaxy Futures. “Disruptions on the supply side have become the primary driver of oil prices.”