Crude oil prices saw an uptick at the start of the week following reports that Islamist rebel groups had ousted Syrian President Bashar Assad. The offensive, which took place over less than a month, left the country under rebel control.
As of now, Brent crude is trading at $71.54 per barrel, while West Texas Intermediate is priced at $67.63 per barrel. Despite these gains, concerns about weak demand growth continue to limit price increases.
“The situation in Syria has introduced more political uncertainty in the Middle East, offering some support to oil prices,” said Tomomichi Akuta, an analyst at Mitsubishi UFJ Research and Consulting. However, he pointed out that Saudi Arabia’s price cuts and OPEC+’s decision to extend production cuts last week highlight continued weak demand from China, signaling the possibility of a market slowdown by the end of the year.
IG market strategist Yeap Jun Rong echoed this sentiment, telling Bloomberg that markets largely expect the situation in Syria to remain contained, with minimal risk of a broader disruption to oil supply.
Saudi Arabia’s recent decision to cut oil prices for January deliveries has raised concerns about a potential oversupply in 2025, a scenario many industry analysts have predicted. However, some experts argue that the concerns over both demand and oversupply may be overblown, suggesting that a surprise shift in market conditions could occur as soon as 2025.
Morgan Stanley, for instance, recently adjusted its 2025 Brent crude price forecast upwards. The investment bank believes that OPEC+’s decision to delay reversing production cuts will result in a smaller-than-expected supply surplus, even if China’s demand remains weak.
“OPEC+ actions significantly reduce the supply surplus expected in 2025. However, the extension and slower return of production won’t push the market into a deficit next year,” ING analysts commented after the group’s decision last week.
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