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Oil prices surged yesterday after President Trump announced that the U.S. had seized an oil tanker off the coast of Venezuela, stating it was for a very good reason. While the specific reason has not yet been disclosed, tensions between the U.S. and Venezuela have been running high. Some people suggest that seizing an oil tanker could be considered an act of war, but if there is indeed a valid justification, we may learn more soon. For now, the market seems willing to give the President the benefit of the doubt.

This development comes as we continue to receive conflicting viewpoints about the alleged oil glut, with the International Energy Agency weighing in as well as the Energy Information Administration(EIA) on the glut sign of the coin but OPEC staying firm in their contrition that the market is in balance and so far with the sideway movement in crude lately the markets is in agreement with OPEC .

OPEC has optimism about demand growth, despite widespread concerns about a supply surplus. They project global oil demand will rise by 1.3 million barrels per day in 2025, reaching 105.14 million bpd, and increase by another 1.4 million in 2026 to hit 106.52 million bpd. The majority of this surge comes from non-OECD countries, particularly in Asia, where economies are accelerating rapidly.

Regarding supply, OPEC+ plans to maintain steady production at around 43 million bpd next year to keep the market tightly balanced. Non-OPEC+ producers will add a million bpd this year—an uptick due to seasonal factors and unexpected developments in the fourth quarter—but this growth is expected to slow to 600,000 bpd in 2026, led by the US, Canada, Brazil, and Argentina without overwhelming the market. OPEC asserts there’s no oversupply problem on the horizon, anticipating a stable equilibrium—even as the IEA and financial analysts warn otherwise. With a robust global economy, low inventories, and strong fundamentals, OPEC is confident in a balanced market rather than a downturn.

We didn’t see a glut in yesterday’s oil inventories here in the United States and supportingOPEC’s s positive outlook, recent U.S. oil inventory data tells a similarly encouraging story.

The latest EIA report shows that U.S. commercial crude oil inventories (excluding the Strategic Petroleum Reserve) dropped by 1.8 million barrels from the prior week, leaving total stocks at 425.7 million barrels—about 4% below the five-year average for this season. Gasoline inventories rose by 6.4 million barrels, though they remain 1% below the five-year norm, while distillate fuel inventories climbed by 2.5 million barrels but are still 7% under average. Propane and propylene stocks dipped by 1.8 million barrels yet are 15% above typical levels. Overall, total commercial petroleum inventories fell by 3.2 million barrels last week. Over the past month, petroleum product demand averaged a healthy 20.4 million barrels a day, up 1.6% from last year, with distillate fuel demand rising 3.4% and jet fuel use holding steady—clear signs of a resilient and thriving energy market.

Oil prices retreated after statements from Ukraine’s President Zelenskiy. He indicated that the United States wants to understand the status of peace proposals by Christmas, but clarified that there is no firm deadline set by the US regarding these proposals. Additionally, President Zelenskiy mentioned that control over Ukraine’s Donbas region may be decided through a vote.

Nat gas is pulling back on hopes for a warmup and melting snow by Christmas . Still the EIA reported thatWorking gas in storage was 3,746 Bcf as of Friday, December 5, 2025, according to EIA estimates. This represents a net decrease of 177 Bcf from the previous week. Stocks were 28 Bcf less than last year at this time and 103 Bcf above the five-year average of 3,643 Bcf. At 3,746 Bcf, total working gas is within the five-year historical range.

The key will be when weather forecasts are factored in and predictions shift closer to the holiday. Some forecasters still expect a colder than normal January and are downplaying the Christmas warm-up.

Fox Weather says that Another round of bone-chilling air from the Polar Vortex is expected to invade the central and northeastern U.S. this weekend and help produce the first significant snow of the season for parts of the Interstate 95 corridor if this cold air meets up with moisture that is expected to race across the country. Current computer forecast model guidance suggests that a fast-moving snowstorm will move into the Midwest Saturday and into the Mid-Atlantic and Northeast by Sunday. The speed of the system could limit the overall amount of snowfall along the I-95 corridor and there is still uncertainty regarding where the heaviest snow will track on Sunday.

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