Dec 24 2024: Oil prices advanced on Tuesday, recovering from losses in the previous session, as a combination of stronger U.S. economic data and a cautiously optimistic market outlook lent support. Trading volumes remained subdued ahead of the Christmas holiday.
By 0422 GMT, Brent crude futures rose 33 cents (0.5%) to $72.96 a barrel, while U.S. West Texas Intermediate (WTI) crude futures gained 29 cents (0.4%) to reach $69.53 a barrel.
Analysts Expect Steady Prices Amid Holiday Lull
FGE analysts projected that benchmark prices would stabilize around current levels in the near term due to reduced market activity during the holiday season. They noted that many participants are waiting for clearer signals on global oil balances for 2024 and 2025 before adjusting their positions.
“Given the short positioning in the paper market, any unexpected supply disruptions could trigger sharp price spikes,” the analysts added.
Other experts echoed this cautious optimism. Neil Crosby, assistant vice-president of oil analytics at Sparta Commodities, highlighted a shift in 2025 oil balance projections, citing the U.S. Energy Information Administration’s (EIA) recent outlook. “The EIA’s short-term energy outlook now anticipates a draw in 2025 liquids balances despite the expected return of some OPEC+ barrels,” Crosby explained.
Robust U.S. Economy Underpins Oil Prices
Signs of resilience in the U.S. economy, the world’s largest oil consumer, have also supported crude prices. November saw a surge in new orders for key U.S.-manufactured capital goods, driven by strong machinery demand, while new home sales rebounded, signaling economic strength as the year closes.
Focus Shifts to U.S. Crude Stockpile Data
In the immediate term, traders are awaiting U.S. crude oil and fuel inventory data from the American Petroleum Institute (API) later on Tuesday. A Reuters poll of analysts anticipates a decline in crude inventories by approximately 2 million barrels for the week ending December 20, a potential indication of healthy demand.
The Energy Information Administration (EIA) is scheduled to release its official stockpile data on Friday, which is expected to provide further insights into U.S. demand trends.