Oil prices jumped more than 2% on Monday, snapping a two-week losing streak, as tensions around Venezuelan oil exports stoked supply concerns.
West Texas Intermediate (WTI) traded as high as $58 a barrel following US military actions targeting Venezuelan tankers.
“The oil price also rises by over 2% on supply concerns, snapping a two-week losing streak as the US Navy continues to intercept Venezuelan oil tankers in order to choke off revenues for the country’s government,” said Axel Rudolph, senior technical analyst at IG.
On Saturday, the US Coast Guard boarded the Centuries tanker in the Caribbean, carrying about 2 million barrels of Venezuelan crude—the first non-sanctioned vessel to be targeted. US forces were also pursuing the Bella 1, which was en route to Venezuela.
Kathleen Brooks, research director at XTB, said the recent moves supported oil prices but warned gains might be temporary. “While the announcement sent oil prices soaring, Venezuela alone does not currently produce enough to move the market for the long term, so gains could be fleeting,” she said.
Oil markets posted losses last week, with Brent down 3.5%, WTI down 2.5%, gasoline off 9%, and heating oil falling nearly 10%, offering a mild reprieve for inflation heading into the holidays.
Energy stocks followed the upward trend in oil prices. In the US, Exxon Mobil Corp (NYSE:XOM, XETRA:XONA) climbed 1.3%, Chevron Corporation (NYSE:CVX, XETRA:CHV) rose 1.7%, and ConocoPhillips (NYSE:COP, XETRA:YCP) gained 1.6%.
In Canada, Imperial Oil Limited (TSX:IMO) rose 1.1%, Canadian Natural Resources Limited (TSX:CNQ) added 1.3%, and oil junior Sintana Energy Inc (TSX-V:SEI, OTCQB:SEUSF) soared 12.2%.
UK markets saw BHP Group Ltd (LSE:BHP, ASX:BHP)'s London shares up 1.5% and Arrow Exploration Corp (TSX-V:AXL, AIM:AXL, OTC:CSTPF) jump 2.9%.