Oil prices firmed on Wednesday as market participants weighed up geopolitical tensions and the prospect of OPEC+ extending supply cuts against weaker demand.
Brent crude futures rose 16 cents, or 0.2%, to $73.78 a barrel by 0440 GMT, while U.S. West Texas Intermediate crude futures gained 14 cents, or 0.2%, to $70.08. On Tuesday, Brent posted its biggest gain in two weeks, rising 2.5%.
A shaky ceasefire between Israel and Hezbollah, South Korea’s curtailed declaration of martial law and a rebel offensive in Syria that threatens to draw in forces from several oil-producing countries, all lent support to oil prices, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Oil markets, however, are largely discounting an abundantly supplied 2025 amid sluggish demand signals from the U.S. and China, the world’s top two economies, she added.
“Weaker demand signals from mainland China are raising concerns about demand in the oil market … The world’s largest crude oil importer may struggle to maintain its significant share of global demand by 2025.”
