Oil stabilizes on course for first weekly gain in three years Reuters writes

By Florence Tan and Siii Liu

SINGAPORE (Reuters) – Oil prices steadied on Friday, on track for their first weekly gain since late November, as additional sanctions on Iran and Russia heightened supply concerns while the prospect of a surplus weighed on markets.

futures were up 7 cents at $73.48 a barrel by 0434 GMT, while U.S. West Texas Intermediate crude was at $70.11 a barrel, up 9 cents.

Both contracts are on track for a weekly gain of more than 3% on concerns about supply disruptions due to tougher sanctions on Russia and Iran, and hopes that China’s stimulus measures could lift demand in global prices to support No. 2 oil consumers.

The recent stabilizations came after oil defended the key technical level of $71, said Yeap Jun Rong, market strategist at IG.

“But there was still not much conviction to trigger a stronger price recovery,” he added.

Chinese data this week showed crude oil imports rose year-on-year for the first time in seven months in November, boosted by lower prices and inventories.

“We’ve seen a small recovery in refinery margins since September lows, but we don’t think it’s anything to justify the volume of crude oil imports in November,” said Warren Patterson, head of commodity research at ING.

Crude imports by the world’s top importer will remain elevated until early 2025 as refiners decide to increase supply from top exporter Saudi Arabia, lured by lower prices, while independent refiners rush to use up their quota.

The International Energy Agency raised its forecast for global oil demand growth in 2025 to 1.1 million barrels per day (bpd) from 990,000 bpd last month, thanks to China’s recent stimulus measures, it said in its monthly oil market report.

However, a surplus is forecast for next year, when non-OPEC+ countries are expected to increase supply by about 1.5 million barrels per day (bpd), boosted by Argentina, Brazil, Canada, Guyana and the United States.

“I think with the outlook for a fairly comfortable balance (there is) little reason (for prices) to break out of this range for now,” ING’s Patterson.

Canada’s top three oil producers forecast higher production in 2025 Based on record U.S. output, Goldman Sachs expects Lower 48 shale oil output to rise by 600,000 bpd in 2025, although growth could slow if Brent falls below $70 a barrel .

Investors are also betting that the Fed will cut borrowing costs next week and continue to cut further next year, after economic data showed weekly unemployment insurance claims rose unexpectedly.