The crude oil market appreciated by more than 1 per cent on Tuesday on the prospect of slightly tightening supplies as trade thinned ahead of the holidays.
Brent crude futures traded at $73.58 per barrel after it gained 95 cents or 1.3 per cent while the US West Texas Intermediate (WTI) crude futures settled at $70.10 per barrel after it chalked up 86 cents or 1.2 per cent.
Market activities were muted due to the holiday season, and market participants stayed on the sidelines until they had a clearer view of 2024 and 2025 global oil balances.
Analysts also expect the benchmark prices to fluctuate around current levels in the near term with greater oil demand over the next few months.
The Energy Information Administration’s (EIA) short-term energy outlook (STEO) recently shifted their 2025 liquids to a draw, despite moves by the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ to add barrels next year after delays this year.
Also supportive of prices was a plan by China, the world’s biggest oil importer, to issue 3 trillion yuan ($411 billion) worth of special treasury bonds next year, as it ramps up fiscal stimulus to revive a faltering economy.
The proceeds will be targeted at boosting consumption via subsidy programmes, equipment upgrades by businesses and funding investments in innovation-driven advanced sectors, among other initiatives/
Data from the American Petroleum Institute (API) showed that crude oil and distillate stocks in the US fell last week by 3.2 million barrels and 2.5 million barrels, respectively].
Meanwhile, gasoline (petrol) stocks were seen rising last week just as gasoline inventories were seen rising by 3.9 million barrels.
The figures come ahead of data from the EIA, the statistical arm of the US Department of Energy, due later on Friday.
Markets will also be watching the US economy, the world’s largest oil consumer, which released a mixed bag of data.
Recently, consumer confidence weakened in December, new orders for key US-manufactured capital goods surged in November amid strong demand for machinery and new home sales rebounded.
This suggested that the US economy was on a solid footing as the year closed.
Markets will be closed on Wednesday, December 25 and there will be no global oil market report for the day.