Oil Prices Maintain Upward Momentum for Sixth Day

Oil Prices Maintain Upward Momentum for Sixth Day

Oil prices rose again yesterday, marking the sixth day of gains in a row. Prices are being pushed up by strong economic growth in the US and worries that supplies from Russia and Venezuela might be disrupted. Despite this recent climb, oil is still heading for its biggest yearly price drop since 2020.

Brent crude rose by 13 cents (0.2 per cent) to $62.51 a barrel, while US West Texas Intermediate went up 22 cents (0.4 per cent) to $58.60. Both have increased by roughly six per cent since 16 December, when prices had fallen to nearly five-year lows.

“What we’ve seen over the past week is a combination of position squaring in thin markets, after last week’s breakdown failed to gain traction, coupled with heightened geopolitical tensions, including the U.S. blockade on Venezuela and supported by last night’s robust GDP data,” IG analyst Tony Sycamore said.

US figures show the world’s biggest economy grew at its quickest rate in two years during the third quarter. This was driven by high shopper spending and a big jump in exports.

Even so, Brent and WTI oil prices are set to fall by about 16% and 18% this year. These would be the biggest drops since the 2020 pandemic, mainly because supply is expected to be higher than demand next year.

Problems with supply are currently pushing prices up. Disruptions to exports from Venezuela have had the biggest impact. At the same time, ongoing attacks between Russia and Ukraine on energy plants have also supported prices, according to a report from Haitong Futures.

In Venezuela, more than 12 loaded ships are waiting for orders. This follows the US seizing a supertanker called Skipper earlier this month and targeting two other ships over the weekend.

Furthermore, oil shipments from Kazakhstan are expected to fall by a third this December. This would be the lowest level since October 2024. Sources say this is due to a Ukrainian drone attack that damaged an export terminal.

Finally, US oil stocks rose by 2.39 million barrels last week. Figures from the American Petroleum Institute also show that petrol and other fuel stocks increased.