Oil prices rose by 1% ahead of the holidays

Oil prices rose more than 1% ahead of the holidays, paring losses in the previous session. This growth was due to optimistic short-term prospects associated with the expectation of a slight reduction in supplies. Trading activity has decreased due to the approach of the Christmas holidays and Hanukkah, he writes UNN with reference to Reuters.

Details

Brent crude futures settled at $73.58 per barrel, up 95 cents, or 1.3%. U.S. WTI crude settled at $70.10 a barrel, adding 86 cents, or 1.2%.

FGE analysts predict that oil prices will remain close to current levels in the near future. They noted that activity in financial markets decreases during the holiday period, and market participants refrain from active actions, waiting for clarity on the global oil balance in 2024-2025. Changes in supply and demand in December support their less “bearish” stance, according to FGE’s analyst note.

“Given how short the paper market is in terms of positioning, any supply disruptions could lead to upward swings in the structure,” they added.

Some analysts also pointed to signs of an increase in oil demand over the next few months.

“The year ends with the major agencies’ consensus on long-term liquids balances through 2025 beginning to break down,” Neil Crosby, Sparta Commodities’ assistant vice president of petroleum analytics, said in a note. The EIA’s short-term energy forecast for 2025 recently moved toward a tie, even though OPEC+ will continue to produce barrels of oil next year,” Crosby said.

Prices were mainly supported by a plan by China, the world’s top oil importer, to issue 3 trillion yuan ($411 billion) worth of special treasury bonds next year, as Beijing ramps up fiscal stimulus to revive the economy.

According to OANDA senior market analyst Calvin Wong, Chinese stimulus is likely to provide short-term support for WTI oil at $67 a barrel. Markets will also be watching the US economy, the world’s largest oil consumer.

While consumer confidence weakened in December, new orders for U.S.-made capital goods rose in November amid strong demand for machinery and new home sales rebounded, suggesting the U.S. economy is on solid footing heading into the year. writes the publication.

On Wednesday, December 25, the US markets will be closed, and there will be no report on the world oil market that day.

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