Oil Heads for Biggest Annual Decline Since 2020

Oil prices edged lower on Wednesday and are on track to record their largest annual drop since 2020, as investors weighed the outlook for US economic growth against supply disruption risks linked to Venezuela and Russia.

Brent crude futures settled down 14 cents, or 0.2 percent, at $62.24 a barrel, while US West Texas Intermediate crude slipped 3 cents, or 0.05 percent, to $58.29 a barrel.

Latest Oil Prices:

WTI Crude • 58.35 -0.03 -0.05%

Brent Crude • 62.24 -0.14 -0.22%

Murban Crude • 62.80 -0.24 -0.38%

Natural Gas • 4.242 -0.166 -3.77%

Louisiana Light • 60.88 +1.48 +2.49%

Bonny Light • 78.62 -2.30 -2.84%

Opec Basket • 61.22 +0.00 +0.00%

Mars US • 70.06 -0.92 -1.30%

Gasoline • 1.747 +0.004 +0.22%

Market sentiment has been shaped by a combination of thin liquidity, recent price volatility, and rising geopolitical tensions. Tony Sycamore, an analyst at IG, said the past week reflected position liquidations in low-liquidity markets after last week’s sell-off failed to gain momentum, alongside escalating geopolitical risks such as the US blockade of Venezuela, supported by strong US gross domestic product data released overnight.

Recent US data showed that the world’s largest economy expanded at its fastest pace in two years during the third quarter of 2025, driven by strong consumer spending and a sharp rebound in exports. Despite this economic strength, Brent and WTI are expected to fall by around 16 percent and 18 percent respectively this year, marking their steepest annual losses since the COVID-19 pandemic hit global oil demand in 2020, as supply is forecast to exceed demand next year.

On the supply side, disruptions to Venezuelan exports have been a key factor supporting prices, while reciprocal attacks by Russia and Ukraine on energy infrastructure have also underpinned the market, according to a report by Haitong Futures. More than a dozen oil-laden vessels are currently waiting off Venezuela for new instructions after the United States seized the supertanker Skipper earlier this month and targeted two additional vessels over the weekend.

Dennis Kissler, senior vice president of trading at BOK Financial, said holiday-driven volatility is likely to dominate trading, with the US blockade on Venezuela remaining a central focus over the coming days.

Additional supply concerns emerged from Kazakhstan, where oil shipments through the Caspian Pipeline Consortium are expected to fall by about a third in December, reaching their lowest level since October 2024. The decline follows damage caused by a Ukrainian drone attack on facilities at the pipeline’s main export terminal, according to market sources.

Meanwhile, US inventory data added further pressure to prices. Market sources cited figures from the American Petroleum Institute showing that US crude oil inventories rose by 2.39 million barrels last week, while gasoline stocks increased by 1.09 million barrels, and distillate inventories climbed by 685,000 barrels. Official inventory data from the US Energy Information Administration is due to be released on Monday, delayed due to the Christmas holiday.