Oil prices rose more than 1% on Monday (December 1st) following a drone attack by Ukraine, the closure of Venezuelan airspace by the United States, and OPEC's decision to leave production levels unchanged for the first quarter of 2026.

Brent crude closed at $63.17 per barrel, up 79 cents, or 1.27%. U.S. West Texas Intermediate crude closed at $59.32 per barrel, up 77 cents, or 1.32%.

"The market is very nervous right now about the possible loss of Russian crude oil supplies," said John Kilduff, partner at Again Capital LLC. "They're watching closely to see if this Russia-Ukraine deal will go south."

Concerns about a possible conflict between the United States and Venezuela are far outweighed by the focus on the war in Ukraine.

"I don't think anyone is overly concerned about the loss of supplies from Venezuela," Kilduff said.

Phil Flynn, senior analyst at Price Futures Group, said the Ukrainian attack, combined with OPEC's production commitments, drove prices higher in morning trading in New York.

"The Ukrainian drone attack on Russia's shadow fleet, along with OPEC's commitment to maintain current production levels, has the market in a state of optimism," Flynn wrote in a morning note. "This comes as global oil demand continues to rise despite the negative sentiment we continue to hear from the demand side."

The Caspian Pipeline Consortium, which transports 1% of global oil, said on Saturday that one of its three mooring points at the Novorossiysk terminal had been damaged, halting operations. However, Chevron, a CPC shareholder, said Sunday night that loading was continuing at Novorossiysk. Typically, two moorings are used for loading, while the other is used as a backup.

The attack on the CPC export terminal pushed oil prices higher, said UBS analyst Giovanni Staunovo.

The attack came as Ukraine stepped up its military operations in the Black Sea and attacked two oil tankers bound for Novorossiysk.

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and its allies initially agreed to a pause in early November, slowing efforts to regain market share amid concerns about oversupply. (alg)

Source: Reuters.com