Oil prices steadied on Friday, heading for their first weekly gain since late November. Additional sanctions on Iran and Russia have raised supply concerns, while the prospect of a glut weighed on markets.
Brent crude futures rose 7 cents to $73.48 a barrel by 0434 GMT, while WTI crude was up 9 cents to $70.11 a barrel.
Brent and WTI are on track for weekly gains of more than 3% as tougher sanctions on Russia and Iran, uncertainty over supply cuts, and hopes grow that Chinese stimulus could boost demand in the world’s No. 2 oil consumer.
It’s possible to say that stability has arrived after oil defended the key technical level of $71, but there’s not enough to encourage a stronger price recovery just yet.
This week, Chinese data showed that crude imports rose annually for the first time in seven months in November. It is the consequence of lower prices and more adequate storage.
Refining margins have recovered somewhat since September’s lows, but this is not thought to justify November’s crude import volumes.
China, the world’s largest importer, is looking to draw more crude from Saudi Arabia, the world’s largest exporter, while independent refiners are rushing to use up their quotas, which are expected to remain high until early 2025.
The IEA is forecasting a glut in 2025. The International Energy Agency said in its monthly oil market report that it raised its 2025 global oil demand growth forecast to 1.1 million barrels per day (bpd) from 990,000 barrels per day (bpd) last month, thanks to China’s latest stimulus measures.
However, non-OPEC+ countries Argentina, Brazil, Canada, Guyana, and the United States are projecting a surplus of around 1.5 million barrels per day (bpd) of supply next year.
Given the relatively comfortable outlook, there is little reason for prices to move out of that range for now.
Shale production is expected to rise by 600,000 bpd in 2025, based on record U.S. production.
But things could change if Brent falls below $70 a barrel.
Investors are also looking ahead to the Fed’s plan to cut borrowing costs next week and cut more next year after economic data showed weekly jobless claims unexpectedly rose.
