Oil prices rose more than 1% on Tuesday. Reversing losses from the previous session as the near-term outlook improved amid the possibility of some ease in trading and a slight tightening of supply ahead of the Christmas and Hanukkah holidays.
Brent crude futures rose 95 cents, or 1.3%, to $73.58. WTI crude futures rose 86 cents, or 1.2%, to $70.10.
As activity in paper markets wanes during the holiday season and market participants hold off until they have a clearer view of global oil balances in 2024 and 2025, benchmark prices are expected to fluctuate around current levels in the near term.
December’s supply and demand changes so far have been less supportive of current bearish views.
Given the slowdown in paper market activity during the holiday season, any supply disruptions could lead to bullish bounces in the structure.
Some analysts also point to more oil demand signs in the next few months.
Meanwhile, as 2024 draws to a close, major agencies have begun to break consensus on long 2025 liquidity balances.
The short-term energy outlook sees a pullback in oil supply in early 2025, even as OPEC+ considers bringing some production back next year.
U.S. crude and distillate inventories fell by 3.2 million barrels and 2.5 million barrels respectively last week, while gasoline inventories rose by 3.9 million barrels, according to figures from the American Petroleum Institute (API).
The Energy Information Administration’s (EIA) data, the statistics arm of the U.S. Department of Energy, will be released at 1800 GMT on Friday.
Also supporting prices was China, the world’s largest oil importer,’s plan 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.
China’s stimulus is also likely to provide near-term support for WTI crude.
Markets will also be watching the U.S. economy, the world’s largest oil consumer, which has been reporting mixed data.
While consumer confidence weakened in December, new orders for core U.S.-made capital goods rose in November, as demand for machinery and new home sales picked up, suggesting the U.S. economy is on solid ground as the year draws to a close.
U.S. markets will be closed on Wednesday, Dec. 25, and there will be no global oil market report for the day.
