09 Dec 2024

• WTI attracts some buyers and snaps a three-day losing streak to a multi-week trough.
• Rising Middle East tensions turn out to be a key factor underpinning the commodity.
• Concerns about slowing demand in China and the global supply glut could cap gains.
• West Texas Intermediate (WTI) crude oil prices are demonstrating a degree of resilience as they remain below the $67.00 threshold, attracting some buyers at the beginning of the week. Currently, the commodity is trading just under the mid-$67.00 range, reflecting a 0.60% increase for the day, and appears to have ended a three-day decline that reached a three-week low on Friday.
  
  Last week, the Organization of the Petroleum Exporting Countries and its allies, collectively referred to as OPEC+, made the decision to delay planned supply increases by three months, pushing the timeline to April, and to extend the complete unwinding of production cuts by an additional year, now set to conclude at the end of 2026. Furthermore, the escalating conflict between Russia and Ukraine, coupled with the recent ousting of Syrian President Bashar al-Assad by rebel forces, continues to elevate the geopolitical risk premium, providing additional support for crude oil prices.
• 1. Additionally, indicators of economic resilience in the United States, coupled with expectations that the expansionary policies of President-elect Donald Trump will enhance fuel demand, provide some support for crude oil prices. In contrast, Saudi Arabia's price reductions for Asian customers have raised concerns regarding a potential decline in demand from China, the leading oil importer globally. Furthermore, apprehensions about a possible oversupply may limit any significant increase in crude oil prices.
  
  Moreover, a widely monitored report from Baker Hughes released on Friday revealed that the number of active oil and gas rigs in the United States reached its highest level since mid-September last week. This suggests an increase in output from the world's largest crude oil producer, which may further suppress crude oil prices. Therefore, it would be wise to await substantial follow-through buying before making any positions anticipating further appreciation of the commodity.