Oil prices rose yesterday, and reversed the prior session’s losses on a brightening short-term market outlook tied to the prospect of slightly tightening supplies as trade thinned ahead of the Christmas and Hanukkah holidays.
According to Reuters, Brent crude futures rose by 88 cents, or 1.2 per cent, to trade at $73.51 a barrel, while U.S. West Texas Intermediate crude futures also rose by 91 cents, or 1.3 per cent, to trade at $70.15 a barrel.
FGE analysts said they anticipate that the benchmark prices will fluctuate around current levels in the near term “as activity in the paper markets decreases during the holiday season and market participants stay on the sidelines until they get a clearer view of 2024 and 2025 global oil balances.”
“Given how short the paper market is on positioning, any supply disruption could lead to upward spikes in structure,” they added. Some analysts also pointed to signs of greater oil demand over the next few months.
Neil Crosby, Sparta Commodities’ assistant vice-president of oil analytics, said in a note: “The year is ending with the consensus from major agencies over long 2025 liquids balances starting to break down.
“The EIA’s short-term energy outlook (STEO) recently shifted their 2025 liquids to a draw, despite continuing to bring back some OPEC+ barrels next year.”
According to Reuters, a plan by China, the world’s biggest oil importer, to issue 3 trillion yuan ($411 billion) worth of special treasury bonds next year, as Beijing ramps up fiscal stimulus to revive a faltering economy, also supported prices.
