Crude Oil Rebounds Strongly As Trump Orders Venezuelan Tanker Blockade

(RTTNews) - After moving sharply lower over the past several sessions, the price of crude oil has shown a substantial move back to the upside during trading on Wednesday.

Crude oil for January was last seen trading at $55.97 a barrel, up $0.70 or 1.3 percent, after tumbling to its lowest levels since early 2021 during Tuesday's session.

The rebound by the price of crude oil comes after U.S. President Donald Trump ordered a blockade of sanctioned oil tankers in Venezuela.

In a Truth Social post, Trump declared the government of President Nicolas Maduro a foreign terrorist organization and said he was ordering a "total and complete blockade of all sanctioned oil tankers" going into and leaving Venezuela.

"Venezuela is completely surrounded by the largest Armada ever assembled in the History of South America. It will only get bigger, and the shock to them will be like nothing they have ever seen before — Until such time as they return to the United States of America all of the Oil, Land, and other Assets that they previously stole from us," Trump wrote.

The blockade, coming a week after U.S. forces seized the very large crude carrier Skipper off Venezuela's coast, raised fresh geopolitical tensions at a time of concerns over demand.

Oil prices may also have benefitted from a report from the Energy Information Administration showing crude oil inventories in the U.S. decreased by slightly more than expected in the week ended December 12th.

The report said crude oil inventories fell by 1.3 million barrels last week after declining by 1.8 million barrels in the previous week. Economists had expected crude oil inventories to dip by 1.0 million barrels.

At 424.4 million barrels, U.S. crude oil inventories are about 4 percent below the five-year average for this time of year, the EIA said.

However, the EIA also said gasoline inventories jumped by 4.8 million barrels last week and are just slightly below the five-year average for this time of year.

Distillate fuel inventories, which include heating oil and diesel, also rose by 1.7 million barrels last week but remain about 6 percent below the five-year average for this time of year, the report said.