Oil prices rose as the market continued to assess US economic growth and supply risks
Weekly US crude oil and fuel inventories rose last week as the US economy grew faster than expected in the third quarter. Oil prices closed higher on Tuesday as investors assessed stronger-than-expected US economic growth, rising US oil and fuel inventories, and the risk of potential disruptions to oil supply from Venezuela and Russia.
Brent crude futures rose 31 cents, or 0.5%, to $62.38 a barrel. US West Texas Intermediate (WTI) crude rose 37 cents, or 0.64%, to $58.38.
Prices had already risen more than 2% on Monday; Brent crude posted its biggest daily gain in two months, while WTI crude saw its largest increase since November 14.
The US Commerce Department's Bureau of Economic Analysis announced on Tuesday its initial estimate of third-quarter GDP, stating that the US economy grew faster than expected due to strong consumer spending.
The dilemma in the market will be whether to be excited about demand stemming from strong growth or to worry that the Fed will have to curb that growth to control inflation.
Other data painted a mixed picture of the economy. Data released on Tuesday showed that U.S. consumer confidence worsened in December due to growing concerns about jobs and income, while factory production remained unchanged in November after declining in October.
Investors were also assessing the risk of potential disruptions to Venezuelan supply.
U.S. President Donald Trump imposed sanctions on all oil tankers entering and leaving Venezuela earlier this month, alarming shipowners.
With dwindling storage capacity in Venezuela, the country risks having to halt some of its production activities.
Trump has said the U.S. could keep or sell seized Venezuelan oil.
Following further U.S. measures against ships, tanker loading in Venezuela has slowed, with most vessels only transporting oil between domestic ports.
Disruptions to Russian oil transportation also supported prices.
Critical attacks by Russia and Ukraine on each other's oil facilities, loading points, and tankers carrying products continue.
While oil markets are expected to have good supply levels in the first half of 2026, the oil surplus is likely to fall to only 700,000 barrels per day in the fourth quarter of 2026, and prolonged disruptions are likely to tighten the market.
Based on Tuesday's American Petroleum Institute (API) data, US crude oil inventories increased by 2.39 million barrels last week, gasoline inventories by 1.09 million barrels, and distillate fuel inventories by 685,000 barrels.
The US Energy Information Administration will release its data on Monday, later than usual due to the holidays.
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