Oil prices stabilised on Friday as additional sanctions on Iran and Russia eased supply worries, while a surplus outlook weighed on markets.
Brent crude futures edged up 7 cents to $73.48 a barrel while the US West Texas Intermediate (WTI) crude was at $70.11 a barrel, up 9 cents.
Concerns about supply disruption from tighter sanctions on Russia and Iran, two of the world’s top oil producers, helped buoy prices after the International Energy Agency (EIA) on Thursday said it expects the oil market to be comfortably supplied in 2025, despite seeing an increase in demand
The IEA in its monthly oil market report, increased its 2025 global oil demand growth forecast to 1.1 million barrels per day from 990,000 barrels per day last month, largely in Asian countries due to the impact of China’s recent stimulus measures.
At the same time, the IEA expects other nations to boost supply by about 1.5 million barrels per day next year, driven by the US, Canada, Guyana, Brazil and Argentina – more than the rate of demand growth.
On Wednesday, the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+ cut its demand growth forecast for 2024 for the fifth straight month.
The IEA said that, even excluding the return to higher output quotas, its current outlook is to a 950,000 barrels per day supply overhang next year, which is almost 1 per cent of the world’s supply.
The Paris-based agency said this would rise to 1.4 million barrels per day if OPEC+ goes ahead with its plan to start unwinding cuts from the end of next March.
Next year’s surplus could make it harder for OPEC+ to bring back production. The hike was earlier due to start in October 2024, but OPEC+ has delayed it amid falling prices.
Meanwhile, inflation rose slightly in November increasing the possibility of a US Federal Reserve rates cut again as the data fed optimism about economic growth and energy demand.
Support also came as crude imports in China grew annually for the first time in seven months in November, up more than 14 per cent from a year earlier.