Oil prices steady on track for first weekly gain in three weeks
Oil prices were steady on Friday, heading for their first weekly gain since late November, as fresh sanctions on Iran and Russia raised supply concerns, while the prospect of a surplus weighed on the market.
Brent crude edged up 7 cents to $73.48 a barrel by 0434 GMT, while U.S. West Texas Intermediate crude was at $70.11 a barrel, up 9 cents.
Both contracts were on track for weekly gains of more than 3% as concerns about supply disruptions from tighter sanctions on Russia and Iran, and hopes that Chinese stimulus measures could boost demand in the world’s No. 2 oil consumer, supported prices.
The recent stabilization came after oil held near the key technical level of $71, said Yeap Jun Rong, market strategist at IG.
“But there is not much conviction to push for a stronger recovery at the moment,” he added.
Chinese data this week showed crude imports grew on an annual basis for the first time in seven months in November, driven by lower prices and stocks.
“We’ve seen a bit of a recovery in refining margins since the September lows, but we don’t think it’s something that justifies the November crude import volumes,” said Warren Patterson, ING’s head of commodity research.
Crude imports by the world’s largest importer will remain high until early 2025 as refiners opt to add supplies from top exporter Saudi Arabia, attracted by lower prices, while independent refiners rush to use up their quotas.
The International Energy Agency raised its forecast for 2025 global oil demand growth to 1.1 million barrels per day (bpd) from 990,000 bpd last month, thanks to recent Chinese stimulus measures, it said in its monthly oil market report.
However, it expects a surplus for next year, as non-OPEC+ countries prepare to increase supply by about 1.5 million barrels per day (bpd), led by Argentina, Brazil, Canada, Guyana and the United States.
"I think with the outlook for a fairly comfortable balance (there's) little reason (for prices) to move out of this range for now," ING's Patterson said.
Canada's three largest oil producers are forecasting higher output in 2025. Based on record U.S. production, Goldman Sachs expects Lower 48 shale production to grow by 600,000 bpd in 2025, although growth could slow if Brent falls below $70 a barrel.
Investors are also betting the Fed will cut borrowing costs next week and follow up next year with further cuts, after economic data showed weekly claims for unemployment insurance unexpectedly rose.
Source: Investing.com
