Oil prices climbed on Tuesday, rebounding from the previous session’s losses. This increase reflects a brighter short-term market outlook, driven by expectations of slightly tighter supplies as trading activity slows before the Christmas and Hanukkah holidays.
Brent crude futures rose 88 cents (1.2%) to $73.51 per barrel, while U.S. West Texas Intermediate (WTI) crude futures increased 91 cents (1.3%) to $70.15 per barrel.
FGE analysts predict benchmark prices will hover near current levels in the short term. The slowdown in paper market activity during the holiday season and traders awaiting clarity on 2024–2025 global oil balances contribute to this stability.
“Any supply disruption could cause sharp price increases,” FGE noted, highlighting the short positioning in paper markets.
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Some analysts see signs of rising oil demand in the coming months. Neil Crosby, assistant vice president of oil analytics at Sparta Commodities, pointed out shifting expectations:
- Major agencies’ consensus on 2025 liquid balances is weakening.
- The EIA’s short-term energy outlook (STEO) recently projected a draw in 2025 liquids despite plans to reintroduce some OPEC+ barrels next year.
China’s plan to issue 3 trillion yuan ($411 billion) in special treasury bonds to stimulate its economy further supported oil prices. As the world’s largest oil importer, China’s fiscal measures are expected to stabilize demand.
Kelvin Wong, senior market analyst at OANDA, noted that this development could provide near-term support for WTI crude at $67 per barrel.
U.S. Economic Data Offers Mixed Signals
The U.S., the world’s largest oil consumer, also influenced market sentiment with mixed economic indicators:
- Consumer confidence dipped in December.
- New orders for capital goods surged in November, fueled by strong demand for machinery.
- New home sales rebounded, suggesting a stable economic footing as the year concludes.
- Brent crude rose 1.2% to $73.51, and WTI crude gained 1.3% to $70.15.
- Analysts expect price stability as holiday trading activity slows.
- Rising demand signals and China’s stimulus plan support prices.
- U.S. economic data shows resilience despite mixed signals.
