Global oil prices rise to $73.05/barrel in pre-Christmas trade 

Brent crude futures gained 42 cents, from $72.63 or 0.6%, to settle at $73.05 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose by 38 cents, or 0.6%, reaching $69.62 a barrel as of 0742 GMT, Reuters reported.

Analysts at FGE noted that benchmark prices are likely to remain stable around current levels in the short term due to reduced trading activity during the holiday season.

“As activity in the paper markets decreases and market participants stay on the sidelines until they get a clearer view of 2024 and 2025 global oil balances, prices should see limited movement,” they remarked in a note.

The analysts highlighted supportive supply and demand dynamics in December that contributed to their less bearish outlook.

“Given how short the paper market is on positioning, any supply disruption could lead to upward spikes in structure,” they added, signaling potential volatility if unexpected events occur.

Other market watchers echoed similar sentiments, forecasting a positive trajectory for oil in the coming months. Neil Crosby, assistant vice-president of oil analytics at Sparta Commodities, commented on shifting views regarding long-term balances.

“The year is ending with the consensus from major agencies over long 2025 liquids balances starting to break down,” Crosby said. He pointed to the U.S. Energy Information Administration’s (EIA) latest short-term energy outlook, which now forecasts a draw in 2025 liquid balances despite expectations of increased OPEC+ production next year.

In addition, China’s announcement of a plan to issue 3 trillion yuan ($411 billion) in special treasury bonds in 2024 to stimulate its struggling economy bolstered market sentiment. As the world’s largest oil importer, China’s fiscal measures are expected to drive energy demand. “This is likely to provide near-term support for WTI crude at $67 a barrel,” said Kelvin Wong, senior market analyst at OANDA.

While market participants tread cautiously due to uncertainties surrounding the global economic outlook and energy policies, the pre-Christmas trading session reflects a market still poised for potential gains as 2024 approaches.

The Nigerian National Petroleum Company (NNPC) Limited has slashed the ex-depot price of Premium Motor Spirit (PMS), commonly known as petrol, from ₦1,020 to ₦899 per litre.

However, it remains to be seen how the Nigerian market will respond to the recent slight increase in global oil prices, and whether the local market will maintain the downward trajectory in fuel costs.