Oil Edges Higher With Oversupply Concerns Limiting Price Gains
Oil edged higher, but prices remain broadly stuck in a narrow band, as traders weigh the outlook for consumption and a possible oversupply next year.
Brent crept above $72 a barrel in London after ending little changed on Tuesday, near its lowest level this month. Crude’s slight gain coincided with a respite from an election-driven dollar rally that has made commodities less attractive for some buyers.
Oil prices remain thoroughly rangebound though, trading in a band of a little over $5 for close to a month as traders weigh the outlook for next year. OPEC shaved its demand-growth forecasts for a fourth consecutive month on Tuesday, with outlooks from the US and International Energy still to come this week.
“The market is looking for a catalyst to break out,” said Harry Tchilinguirian, group head of research at Onyx Capital Group. “In the broader story, OPEC+ cuts afford somewhat of price support while the macro economic realities put in place a cap. In between, the price has fluctuated with the ups and downs of geopolitical risk premia.”
Even as prices remain stuck for now, Morgan Stanley cut its oil price forecast citing the likelihood of a glut next year. The bank reduced its expectations for consumption this year and next and said while the second Trump presidency could impact prices considerably, it would be hard to call the direction for a while.
Brent for January settlement rose 0.9% to $72.55 a barrel at 10:26 a.m. in London.
WTI for December delivery was 1% higher at $68.78 a barrel.
Source : Bloomberg
