WTI Oil Rises Even as Forecasts See Rising Production and Bigger Inventories Next Year
West Texas Intermediate (WTI) crude oil closed higher on Friday, rebounding from day-prior losses, at the end of a week dominated by expectations that rising supply is ready to top demand and new sanctions on Russian exports.
WTI oil for January delivery close up US$1.27 to settle at US$71.29 per barrel, while February Brent oil was last seen up US$1.12 to US$74.53.
Both the Energy Information Agency and the International Energy Agency said this week they expect production to begin rising above demand in 2025 on higher output from North and South America, even as OPEC+ continues to restrict production.
The looming threat of over supply is offset by geopolitical concerns, as Donald Trump's return to the U.S. presidency raises worries over his threats to apply blanket tariffs on imports that could disrupt global trade. Continuing Middle East violence and Russia's war in Ukraine are also supporting a risk premium.
The outgoing Biden Administration and the European Union are applying further sanctions on Russian oil exports as they targets the 'shadow fleet' of tankers that shipping the country's oil in defiance of existing sanctions.
"The latest attempts to constrain Russia and its hard-core buyers ... raises two salient questions: can they be effectively enforced to meaningfully reduce the amount of available oil and lead to supply shortage and keeping in mind Donald Trump's pledge to end the Ukrainian war in "24 hours" will they remain in place after January 20," PVM Oil Associates noted.
Source : MT Newswires
