Dec 4 2024: Oil prices rose slightly on Wednesday as geopolitical uncertainties and expectations of OPEC+ extending production cuts countered concerns about declining demand.
Brent crude gained 23 cents (0.3%) to reach $73.85 per barrel, while U.S. West Texas Intermediate (WTI) crude climbed 19 cents (0.3%) to $70.13.
Brent’s 2.5% rise on Tuesday marked its biggest increase in two weeks.
Geopolitical tensions, including a tenuous ceasefire between Israel and Hezbollah, South Korea’s political turmoil, and escalating conflict in Syria, supported prices, according to Priyanka Sachdeva, senior market analyst at Phillip Nova.
However, sluggish demand from the U.S. and China, the world’s top oil consumers, has tempered market optimism, with analysts warning that China may struggle to sustain its role as a leading oil importer by 2025.
In the U.S., crude oil inventories rose by 1.2 million barrels last week, while gasoline stocks surged by 4.6 million barrels, according to the American Petroleum Institute (API). Official data from the Energy Information Administration (EIA) is expected to show a smaller crude stock decline of 700,000 barrels.
Meanwhile, OPEC+ is likely to extend output cuts through the first quarter of 2025, although non-OPEC supply growth is projected to outpace global demand next year.
Geopolitical risks and OPEC+ strategies are providing short-term price support, but demand uncertainties continue to weigh on market sentiment.
