Oil Steadies as Higher Chinese Demand Counters Rising Surplus
Oil held near the lowest level in almost two months, with improved demand in China helping to offset global output that’s running ahead of consumption.
Brent was little changed around $61 a barrel in thin trading ahead of the Christmas and New Year holidays. China’s apparent oil demand and refining activity in November were higher than a year earlier, but other monthly figures signaled weakness in the broader economy.
Oil is set for an annual loss, with supply set to exceed demand this year and next. Concerns about the glut are showing up in the key Middle Eastern crude market, though geopolitical uncertainty has injected some risk premium into prices.
There are plenty of geopolitical inputs at play, including US-led efforts to end the war in Ukraine, attacks on shipping in the Black Sea and the risk of US military action in Venezuela after the Trump administration detained a supertanker last week.
Yet a growing number of bearish positions in Brent shows more market participants are betting on the oversupply outlook, according to Keshav Lohiya, founder of consultant HiLo Analytics.
“Markets continue to give a big collective shrug to any geopolitical outage right now,” Lohiya said.
Brent for February settlement was down 0.08% at $61.07 a barrel as of 10:13 a.m. in London.
West Texas Intermediate for January delivery slipped 0.1% to $57.37 a barrel.
Source : Bloomberg.com
