Oil prices show modest rebound after lengthiest weekly drop in five years - TopForex.Trade

Oil prices show modest rebound after lengthiest weekly drop in five years

After experiencing its longest weekly decline in five years, the oil market sees a slight uptick as supply-demand dynamics shift. Brent trades above $76 a barrel, breaking a seven-week slump, while West Texas Intermediate stabilizes around $72.

Oil prices show modest rebound after lengthiest weekly drop in five years

Following its lengthiest weekly decline in five years, oil experienced a modest rebound, driven by indications that the balance between supply and demand is shifting. The global benchmark, Brent, saw an uptick above $76 per barrel, halting a seven-week slide, while West Texas Intermediate hovered around $72. Contributing to this turnaround was a stronger-than-anticipated US jobs report and plans to replenish the Strategic Petroleum Reserve, ending a six-day losing streak on Friday. Notably, signs of increased demand are emerging, with expectations for the busiest year-end travel season in the US since 2000.

Since late September, oil prices have dropped by approximately a fifth, despite additional output cuts by OPEC+ and statements from Saudi Arabia and Russia suggesting possible extensions beyond March. The surge in production from non-OPEC+ countries, particularly the United States, coupled with anticipated slowing Chinese demand growth and the looming possibility of a US recession, has fueled the decline.


Learn how to trade oil and gas with Top Forex and CFD brokers


In the coming week, clarity on supply and demand fundamentals may emerge from the monthly reports of the International Energy Agency, the Organization of Petroleum Exporting Countries, and the US Energy Department. Additionally, investors will closely watch the Federal Reserve’s final rate decision of the year.

Amidst the downturn, consumers, including airlines and utilities, have taken advantage of lower prices to secure more affordable barrels. Trading activity has seen a surge in call spreads in Brent, limiting the impact on buyers during a crude price rebound.

However, signs of weakness persist in time spreads, as Brent and WTI exhibit a bearish contango structure in their three-month spreads. Brent’s contango spread is currently at 13 cents, a notable shift from the 86 cents in the opposite, bullish backwardated structure observed a month ago.


Subscribe for our newsletter

Get Forex brokers reviews, market insights, expert analytics and education material right into your inbox for free!

You can unsubscribe any time by clicking the link in our letters.