Oil prices up by 1% in thin pre-holiday trade
© Reuters. FILE PHOTO: An aerial view shows Yang Mei Hu oil products tanker getting moored at the crude oil terminal Kozmino on the shore of Nakhodka Bay near the port city of Nakhodka, Russia June 13, 2022. Picture taken with a drone. REUTERS/Tatian
Oil prices rose by more than 1% on Tuesday, reversing the prior session's losses on a brightening short-term outlook tied to the prospect of slightly tightening supplies as trade thinned ahead of the Christmas and Hanukkah holidays, News.az reports citing Reuters.
Brent crude futures settled at $73.58, rising 95 cents, or 1.3%. U.S. West Texas Intermediate crude futures settled at $70.10, rising 86 cents, or 1.2%.
FGE analysts said they expect 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."
Supply and demand changes in December have been supportive of their current less-bearish view so far, the FGE analysts said in a note.
"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.
"The year is ending with the consensus from major agencies over long 2025 liquids balances starting to break down," Neil Crosby, Sparta Commodities' assistant vice president of oil analytics, said in a note.
"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," Crosby said.
U.S. crude oil and fuel stockpiles were expected to have fallen last week, with crude down about 1.9 million barrels in the week to Dec. 20, an extended Reuters poll showed.
Brent crude futures settled at $73.58, rising 95 cents, or 1.3%. U.S. West Texas Intermediate crude futures settled at $70.10, rising 86 cents, or 1.2%.
FGE analysts said they expect 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."
Supply and demand changes in December have been supportive of their current less-bearish view so far, the FGE analysts said in a note.
"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.
"The year is ending with the consensus from major agencies over long 2025 liquids balances starting to break down," Neil Crosby, Sparta Commodities' assistant vice president of oil analytics, said in a note.
"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," Crosby said.
U.S. crude oil and fuel stockpiles were expected to have fallen last week, with crude down about 1.9 million barrels in the week to Dec. 20, an extended Reuters poll showed.
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