International crude oil prices settled more than one per cent higher in the previous session, logging a weekly gain in low trading volume ahead of year-end. This was buoyed by a larger-than-expected drawdown from US crude inventories last week. Optimism over Chinese economic growth has also sparked hopes of higher demand next year from the top oil-importing nation.
Brent crude futures rose 91 cents, or 1.2 per cent, to settle at $74.17 per barrel. US West Texas Intermediate crude futures rose 98 cents, or 1.4 per cent, to $70.60 per barrel. On a weekly basis, both Brent and WTI crude gained about 1.4 per cent. Back home, crude oil futures settled 0.17 per cent higher at ₹6,045 per barrel on the multi-commodity exchange (MCX).
-US crude oil inventories fell by 4.2 million barrels in the week ended December 20 as refiners ramped up activity and the holiday season boosted fuel demand, data from the US Energy Information Administration showed on Friday. Analysts had expected a 1.9 million-barrel drawdown, whereas the American Petroleum Institute estimated a 3.2 million-barrel draw.
-The World Bank on Thursday raised its forecast for Chinese economic growth in 2024 and 2025. Meanwhile, according to the news agency Reuters, Chinese authorities have agreed to issue special treasury bonds worth three trillion yuan ($411 billion) next year as Beijing acts to revive the sluggish economy.
-The war between Russia and Ukraine, which had become an afterthought in energy markets due to stagnant global oil demand, seems to be returning to the forefront after numerous events this week that could impact supplies next year, fuel distributor TACenergy's trading desk wrote on Friday.
-NATO said on Friday it would boost its presence in the Baltic Sea, a day after Finland seized a ship carrying Russian oil on suspicion of causing internet and power cable outages. Meanwhile, Dutch and British wholesale natural gas prices rose amid fading hopes for a new deal to transit Russian gas through Ukraine.
-Tensions have flared in the Middle East after Israel raided a north Gaza hospital and struck targets linked to the Houthi movement in Yemen. Still, analysts said these events will unlikely affect oil prices much heading into next year. Instead, the largest risk is from sanctions enforcement, which will likely occur with the incoming Donald Trump administration in the US.
According to US authorities, crude oil inventories declined by 3.2 million barrels for the week ending December 20, while distillate stocks fell by 2.5 million barrels. However, gasoline stocks surged by 3.9 million barrels, contributing to the drop in oil prices from their intra-day highs.
Analysts also noted that strength in US bond yields exerted downward pressure on oil prices. “The hope for a Chinese stimulus early next year is to provide some support at lower price levels. We anticipate continued volatility in crude oil prices. Crude oil has support at $68.75-68.10 and resistance at $69.85-70.50. In INR, crude oil has support at ₹5,910-5,840, with resistance at ₹6,050-6,110,” said Rahul Kalantri, VP of Commodities, Mehta Equities Ltd.
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