Oil prices climbed on Monday after the fall of Syrian President Bashar Assad’s regime brought more uncertainty to the Middle East, but gains were capped by waning demand outlook for next year.
Brent crude futures rose 36 cents, or 0.51%, to $71.48 a barrel by 0513 GMT. WTI oil futures rose 38 cents, or 0.57%, to $67.58 a barrel.
Saudi Arabia’s crude prices to Asia fell to four-year lows. Brent and WTI rose more than 0.5% after two weeks of declines.
The forces that ousted Syria’s Assad declared victory on state television on Sunday, wiping out a 50-year-old dynasty in a lightning-fast offensive that has raised fears of a new wave of instability in the war-torn region.
Developments in Syria have added a new layer of political uncertainty in the Middle East, providing some support for the market. But Saudi Arabia’s price cuts and last week’s extension of OPEC+’s production cuts underscore weak demand from China, which is a sign the market could soften by the end of the year.
Investors are watching for early signs of whether US President-elect Donald Trump’s expected energy and Middle East policies will have any impact on the market.
The demand outlook for 2025 remains weak. Saudi Aramco, the world’s largest exporter of crude oil, said on Sunday it had cut its prices to Asian buyers in January 2025 to the lowest level since early 2021, as weak demand from top importer China weighed on the market.
On Thursday, the allies, known as OPEC+, postponed the start of oil production increases by three months to April and extended the full end-of-production cuts by a year to the end of 2026.
OPEC+, which accounts for about half of the world’s oil production, had planned to end the cuts starting in October 2024, but slowing global demand, including in China, and rising production elsewhere have forced it to postpone the plan several times.
The number of oil and gas rigs in the U.S. last week also reached the highest level since mid-September, indicating rising output from the world’s largest crude producer.
Both Brent and WTI have reported losses in the past two weeks as a surplus looms next year.
The U.S. Commodity Futures Trading Commission said on Friday that money managers increased their net long U.S. crude futures and options positions in the week to Dec. 3 as prices fell.
Investors are preparing for a data-packed week, including a key U.S. inflation report on Wednesday that could provide more clues to the Fed’s interest rate plans.
Even further rate cuts by the Fed are unlikely to ease the oil market’s concerns about weakening global economic growth and the impact on demand, analysts said in a note on Monday.
Data on Monday showed China’s consumer inflation hit a five-month low in November, while factory deflation persisted and efforts to support weakening economic demand have had limited impact.
Beijing is also set to host a conference this week where policymakers are expected to chart the country’s economy’s path through 2025.
