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Oil prices steadied on Monday, following significant gains last week, as concerns about supply disruptions due to geopolitical tensions kept prices elevated. Brent crude futures slipped 0.34% to $74.91 per barrel, while U.S. West Texas Intermediate crude (WTI) dropped 0.49% to $70.89 per barrel.
Key Factors Affecting Oil Prices
- Geopolitical Tensions
- Russia-Ukraine Conflict: The market saw significant volatility last week after Russia’s hypersonic missile strike on Ukraine, a response to Kyiv’s use of U.S. and British weapons. This escalation raised concerns over potential disruptions to energy supplies, contributing to a boost in oil prices.
- Iran Nuclear Program: Tensions also simmered as Iran activated advanced centrifuges to enrich uranium, prompting international concern. The Iranian government has announced it will hold discussions on its nuclear program with European powers later this month, adding further uncertainty to the market.
- OPEC+ Outlook
- OPEC+ Meeting: Attention is also turning to the OPEC+ meeting on December 1, where the group may decide to maintain its production cuts due to ongoing weak demand. Investors are watching for any signs of policy changes or further cuts that could support oil prices in the coming months.
- China’s Crude Oil Demand
- Increased Imports: Chinese crude imports showed signs of recovery in November, driven by lower oil prices which prompted stockpiling by independent refiners. China’s crude demand is expected to continue rising, with an additional import quota of 5.84 million metric tons (about 116,800 barrels per day) likely to boost imports into next year.
Market Expectations
With geopolitical developments and the upcoming OPEC+ meeting in focus, oil prices are expected to remain volatile. Supply concerns from Russia, Iran, and other key players in the oil market are likely to continue influencing the price trajectory, while China’s increasing demand adds a potential upside for crude prices.
