Oil prices rose on Wednesday as tightening supplies from Russia and OPEC members, coupled with unexpectedly strong U.S. jobs data, signaled expanding economic activity and higher oil demand.
Brent crude gained 28 cents, or 0.36%, to $77.33 a barrel by 0415 GMT, while U.S. West Texas Intermediate crude increased by 40 cents, or 0.54%, to $74.65.
A Reuters survey revealed that oil production from the Organization of the Petroleum Exporting Countries (OPEC) declined in December following two months of growth. Field maintenance in the United Arab Emirates offset increased output in Nigeria and other member countries. In Russia, oil production averaged 8.971 million barrels per day in December, falling short of the country’s target, according to Bloomberg, citing the energy ministry.
On the economic front, the Job Openings and Labor Turnover Survey (JOLTS) showed an unexpected rise in U.S. job openings for November, with low layoffs and reduced worker turnover, indicating a robust labor market.
“Strong U.S. economic data continues to support a positive outlook for the economy and oil demand,” said Yeap Jun Rong, a market strategist at IG. “This is further reinforced by a larger-than-expected drawdown in crude inventories. After months of trading in a tight range since October, selling pressures may be easing, paving the way for a modest recovery.”
According to market sources citing the American Petroleum Institute, U.S. crude oil inventories fell last week, while fuel stocks increased.
Looking ahead, analysts predict oil prices will average lower in 2025 compared to 2024, partly due to increased production from non-OPEC countries. “We maintain our forecast for Brent crude to average $76 per barrel in 2025, down from $80 per barrel in 2024,” said BMI, a division of Fitch Group, in a note to clients.
“Our bearish outlook is driven by fundamental data indicating an oversupply this year, with supply growth outpacing demand growth by 485,000 barrels per day,” the note added.
