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Oil prices gained on Wednesday, supported by tightening supplies from Russia and OPEC members, along with robust U.S. economic data suggesting potential growth in oil demand.
Brent crude rose 0.5% to $77.42 per barrel by 07:30 GMT, while U.S. West Texas Intermediate (WTI) crude climbed 0.6% to $74.69.
A Reuters survey revealed that oil production from the Organization of the Petroleum Exporting Countries (OPEC) declined in December after two consecutive months of increases. Maintenance work in the United Arab Emirates counteracted production gains in Nigeria and other member states.
Russian oil output also fell short of its target, averaging 8.971 million barrels per day in December, according to Bloomberg, which cited the country’s energy ministry.
On the economic front, U.S. job openings unexpectedly increased in November, while layoffs remained minimal, according to the Job Openings and Labor Turnover Survey (JOLTS). Workers were also less inclined to quit, signaling resilience in the labor market.
“Robust U.S. economic data continues to bolster the outlook for the U.S. economy and oil demand, further supported by a larger-than-anticipated drawdown in crude inventories,” noted IG market strategist Yeap Jun Rong.
Yeap added, “After trading within a prolonged tight range since October last year, selling pressures may have been exhausted for now, paving the way for a modest recovery.”
Market sources, citing American Petroleum Institute data, reported a drawdown in U.S. crude oil stocks last week, although fuel inventories rose.
Looking ahead, analysts project that average oil prices in 2025 may decline compared to 2024, partly due to increased production from non-OPEC countries. However, near-term supply constraints and solid economic indicators are likely to provide support for oil prices.
