Crude oil prices rose today following the release of production data from OPEC and Russia, which showed both countries experienced production declines in December.
A boost for oil prices also came from a new employment survey in the United States, which revealed that layoffs were low and job openings were increasing. This suggests a strong U.S. economy, which could drive higher oil demand.
At the time of writing, Brent crude was trading at $77.34 per barrel, while West Texas Intermediate was priced at $74.65 per barrel. Both were up from their opening levels. “Strong U.S. economic data continues to support the outlook for both the U.S. economy and oil demand, further bolstered by a larger-than-expected drop in crude inventories,” said Yeap Jun Rong, an analyst at IG, in a statement to Reuters. “After being stuck in a tight range since October last year, selling pressures may have been exhausted, paving the way for a modest recovery,” he added.
The duration of the current rally remains uncertain. “Cold fronts in the U.S. and Europe are pushing crude prices higher, alongside concerns about a potential loss of Iranian barrels if the Trump administration tightens sanctions,” said Vandana Hari, founder of Vanda Insights, based in Singapore. “However, crude might be overbought and could face profit-taking, especially if global economic challenges come back into focus,” she told Bloomberg.
Earlier this week, Reuters reported that OPEC’s oil production likely fell in December, according to a survey. The UAE saw the largest drop in output due to field maintenance, reducing its production by 90,000 barrels per day (bpd). This offset gains made by other OPEC members, contributing to an overall decline of 50,000 bpd for the group. The survey also indicated that Iran’s output fell by 70,000 bpd.
Russia also reported lower production for December, with a daily average of 8.971 million barrels. This was below the level agreed upon with OPEC+ under the production control deal.
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