Oil prices reversed previous session losses on Tuesday, supported by a slightly positive near-term market outlook and stronger U.S. economic data ahead of the Christmas holiday, despite weak trade.
Brent crude futures rose 33 cents, or 0.5%, to $72.96 a barrel by 0422 GMT, while WTI crude futures rose 29 cents, or 0.4%, to $69.53 a barrel.
As activity in paper markets slowed during the holiday season, market participants are expected to remain reserved until they have a clearer view of global oil balances in 2024 and 2025, with benchmark prices likely to fluctuate at current levels in the short term.
Analysts said changes in supply and demand in December have so far supported their current, less bearish views. Given the paper market, any supply disruption could lead to a bullish bounce in the structure.
Other analysts have also pointed to signs of a positive outlook for oil in the next few months.
The year is ending as major agencies’ consensus on the long 2025 liquidity balances begins to break down.
Solid economic prospects for the United States, the world’s largest oil consumer, also support prices.
New orders for major U.S.-based capital goods rose in November, while new home sales also picked up, a sign that the U.S. economy is on solid footing heading into the year.
In the short term, traders are looking for signs of U.S. demand in Tuesday’s crude and fuel inventories data from the American Petroleum Institute (API).
Some analysts are forecasting crude inventories to fall by an average of 2 million barrels in the week to Dec. 20, a sign of healthy demand. Data from the Energy Information Administration (EIA) will be released on Friday, giving us a clearer picture.
