Oil prices rose on Wednesday as market participants weighed geopolitical tensions and the possibility of OPEC+ extending supply cuts against weak demand.
Brent crude futures rose 16 cents, or 0.2%, to $73.78 a barrel by 0440 GMT, while WTI Crude futures rose 14 cents, or 0.2%, to $70.08.
Brent rose 2.5% on Tuesday, its biggest gain in two weeks.
An unstable ceasefire between Israel and Hezbollah, South Korea’s declaration of limited martial law, and a rebel offensive in Syria all supported oil prices.
However, oil markets are heavily discounting 2025, which is in ample supply amid signals of sluggish demand from the world’s two largest economies, the United States and China.
Weak demand signals from China have raised concerns about oil market demand. The world’s largest importer of crude oil may struggle to maintain its significant share of global demand through 2025.
Meanwhile, market sources, citing data from the American Petroleum Institute (API), said crude oil inventories in the United States rose by 1.2 million barrels last week.
Gasoline inventories also rose by 4.6 million barrels despite the Thanksgiving holiday.
Official data on oil inventories from the U.S. Energy Information Administration (EIA) is due on Wednesday at 1530 GMT. Analysts expect a 700,000-barrel drop in crude and a 639,000-barrel rise in gasoline.
OPEC+, which also supports prices, will likely extend production cuts until the end of the first quarter of next year. OPEC+ aims to gradually end supply cuts over the next year.
The main problem facing the return of OPEC+ supply is that non-OPEC supply growth is expected to eclipse global oil demand growth in 2025.
The International Energy Agency (IEA) expects non-OPEC supply growth, led by the United States, Canada, Guyana, and Brazil, to boost supply by 1.5 million barrels per day (bpd) next year. Global oil demand is expected to rise by only about 1 million bpd as Chinese oil demand is expected to remain subdued.
In the Middle East, Israel said on Tuesday that it would return to war with Hezbollah if the ceasefire breaks down, and its offensive would deepen into Lebanon.
In neighboring Syria, rebels laid siege to the major city of Hama on Tuesday after taking Aleppo by surprise last week.
