Oil prices rise in thin pre-Christmas trade
FILE PHOTO: An aerial view shows Yang Mei Hu oil products tanker getting moored at the crude oil terminal Kozmino on the shore of Nakhodka Bay near the port city of Nakhodka, Russia June 13, 2022. REUTERS/Tatiana Meel/File photo
:Oil prices rose on Tuesday, reversing the prior session's losses, buoyed by slightly positive market outlooks for the short term and stronger U.S. economic data, despite thin trade ahead of the Christmas holiday.
Brent crude futures were up 33 cents, or 0.5 per cent, to $72.96 a barrel, and U.S. West Texas Intermediate crude futures rose 29 cents, or 0.4 per cent, to $69.53 a barrel at 0422 GMT.
FGE analysts said they anticipated the benchmark prices would fluctuate around current levels in the short term "as activity in the paper markets decreases during the holiday season and market participants stay on the sidelines until they get a clearer view of 2024 and 2025 global oil balances."
Supply and demand changes in December have been supportive of their current less-bearish view so far, the analysts said in a note.
"Given how short the paper market is on positioning, any supply disruption could lead to upward spikes in structure," they added.
Some other analysts also pointed to signs of a positive outlook for oil over the next few months.
"The year is ending with the consensus from major agencies over long 2025 liquids balances starting to break down," said Neil Crosby, Sparta Commodities' assistant vice-president of oil analytics, in a note. "The EIA's STEO (short-term energy outlook) recently shifted their 2025 liquids to a draw despite continuing to bring back some OPEC+ barrels next year."
Solid economic prospects for the United States, the world's largest oil consumer, are also supporting prices.
New orders for key U.S.-manufactured capital goods surged in November amid strong demand for machinery, while new home sales also rebounded, in a sign that the U.S. economy is on a solid footing towards the year-end.
In the shorter term, traders are looking for indications of U.S. demand from the crude oil and fuel stockpiles data due from the American Petroleum Institute industry group later on Tuesday.
Analysts polled by Reuters estimated on average that crude inventories fell by about 2 million barrels in the week to Dec. 20 in a sign of healthy demand. The Energy Information Administration is due to release its data on Friday.
