Crude oil prices have found some support this week, driven by China’s economic recovery and OPEC+ production strategies. China, the world’s second-largest oil consumer, reported its fastest factory activity growth in five months, reinforcing optimism about future crude demand. Analysts view Beijing’s targeted stimulus measures as a potential catalyst for stabilizing global oil markets.
OPEC+ has already acted to stabilize prices by extending its voluntary production cuts of 2.2 million barrels per day (bpd) until March 2025. These cuts will then be phased out gradually from April 2025 through September 2026. This decision signals OPEC+’s commitment to preventing an oversupply scenario, as flagged by the International Energy Agency, which predicts a potential surplus of 1 million bpd next year.
Geopolitical Risks Add to Market Uncertainty
Geopolitical tensions in the Middle East continue to weigh on market sentiment. Ongoing clashes and ceasefire violations between Israel and Hezbollah have raised concerns about potential disruptions to oil supplies. The conflict in Syria, marked by rebel offensives, adds another layer of uncertainty, with risks to production hubs in the region.
While these tensions have yet to result in significant supply disruptions, the possibility of escalation remains a factor that traders are monitoring closely. U.S. diplomatic efforts to mediate in the Israel-Gaza conflict further highlight the region’s complex and volatile dynamics.
Source: oilprice.com