In the physical market, a key supply gauge suggests a glut is coming sooner than expected, while timespreads in the futures market are flashing signs of oversupply. Also weighing on oil: OPEC cut its demand growth forecasts for a fourth consecutive month and the dollar hit a one-year high, making commodities priced in the currency less attractive.
Still, a spate of activity in the physical market that sets the Dated Brent benchmark kept oil futures jumpy. London-based Petroineos has so far this month purchased eight crude cargoes, supporting prices at the European close. Brent ended the session below $72 a barrel.
“It’ll be a choppy trade in the mid-60s to mid-70s until the market gets more clarity on the driving narratives,” said Jon Byrne, analyst at Strategas Securities.
Traders continue to track tensions in the Middle East, the prospects of a second Trump presidency and OPEC+ decisions on output. The outlook remains weak, with global supply expected to outpace demand next year. China’s latest measures to kick-start its economy stopped short of direct stimulus, and inflation remains weak.
In one bright spot for bulls, President-elect Donald Trump is expected to name Marco Rubio as secretary of state, a person familiar with the matter said. The Florida senator has previously supported a maximum-pressure campaign against Iran and an emboldened Israeli response to threats from OPEC’s largest producer.
