Oil climbs as Assad's fall brings more uncertainty to Middle East
Business
Brent crude futures rose 36 cents to $71.48 per barrel while US WTI crude gained 37 cents to $67.57
TOKYO/SINGAPORE (Reuters) – Oil prices climbed on Monday after the fall of Syrian President Bashar al-Assad's regime introduced greater uncertainty to the Middle East, although the gains were capped by a waning demand outlook for the coming year.
Brent crude futures rose 36 cents, or 0.51%, to $71.48 per barrel by 0723 GMT. US West Texas Intermediate (WTI) crude futures gained 37 cents, or 0.55%, to $67.57 per barrel.
Syrian rebels announced on state television on Sunday they had ousted President al-Assad, eliminating a 50-year family dynasty in a lightning offensive that raised fears of a new wave of instability in a region already gripped by war.
"The development in Syria has added a new layer of political uncertainty in the Middle East, providing some support to the market," said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting.
"But Saudi Arabia's price reductions and OPEC+'s production cut extension last week underscored weak demand from China, indicating the market may soften toward year-end," he said, noting that investors are watching for early signs of any impact on the markets from US President-elect Donald Trump's expected energy and Middle East policies.
Saudi Aramco, the world's biggest crude oil exporter, has reduced its January 2025 prices for Asian buyers to the lowest level since early 2021, it said on Sunday, as weak demand from top importer China weighs on the market.
On Thursday, the Organisation of the Petroleum Exporting Countries and its allies, a group known as OPEC+, pushed back the start of oil output increases by three months until April, and extended the full unwinding of production cuts by a year until the end of 2026.
OPEC+, responsible for about half of the world's oil output, was planning to start unwinding cuts from October 2024, but a slowdown in global demand - especially from top crude importer China - and rising output elsewhere have forced it to postpone the plan several times.
The number of oil and gas rigs deployed in the United States last week also hit the highest since mid-September, pointing to rising output from the world's biggest crude producer.
With a supply surplus looming next year, both Brent and WTI posted losses for the past two straight weeks.
As prices slid, money managers raised their net long US crude futures and options positions in the week to Dec. 3, the US Commodity Futures Trading Commission said on Friday.
Investors are bracing for a data-packed week, including a key US inflation report on Wednesday that will provide more clues for the Federal Reserve's plans for interest rates.
ANZ analysts said in a note on Monday that even additional Fed rate cuts are unlikely to alleviate oil market concerns about weakening global economic growth and its impact on demand.
Also, Beijing will host a conference this week where policymakers are expected to chart the course for the country's economy in 2025.
China's consumer inflation hit a five-month low in November while factory deflation persisted, data showed on Monday, suggesting efforts to shore up faltering economic demand are having limited impact.
