Oil Prices Rebound Ahead of Christmas Holiday
As the festive season approaches, oil prices have made a comeback, reversing the previous day’s losses. The market outlook for the short term has taken a slightly positive turn, despite thin trading volumes ahead of Christmas.
Brent Crude Futures See Uptick
Brent crude futures rose by 42 cents, or 0.6%, to $73.05 a barrel, while U.S. West Texas Intermediate crude futures climbed 38 cents, or 0.6%, to $69.62 a barrel at 0742 GMT.
Analysts Weigh In
FGE analysts predict that benchmark prices will fluctuate around current levels in the short term, as market activity slows down during the holiday season. They cite supportive supply and demand changes in December, which have contributed to their less-bearish view. Moreover, any supply disruptions could lead to upward price spikes, given the short positioning in the paper market.
Positive Outlook for Oil
Other analysts also point to signs of a positive outlook for oil over the next few months. Neil Crosby, assistant vice-president of oil analytics at Sparta Commodities, notes that the consensus on long 2025 liquids balances is breaking down. The EIA’s recent shift to a draw in 2025 liquids, despite OPEC+ barrels being brought back next year, is also seen as a positive development.
China’s Fiscal Stimulus Boosts Prices
China’s plan to issue 3 trillion yuan worth of special treasury bonds next year, as part of its fiscal stimulus package, is expected to provide near-term support for WTI crude at $67 a barrel, according to OANDA senior market analyst Kelvin Wong. This move is seen as a boost to the economy, which has been faltering in recent times.
Economic Data from the United States
Markets will also be keeping a close eye on the economic impulse from the United States, the world’s largest oil consumer. Recent data releases have been mixed, with new orders for key U.S.-manufactured capital goods surging in November, while new home sales have also rebounded. This suggests that the U.S. economy is on a solid footing as the year comes to a close.
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