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Brent crude traded above $74 a barrel after rising almost 5% last week, while West Texas intermediate was near $71. The US and its allies could consider lowering the price cap on Russian crude to further limit Moscow’s ability to fund the war in Ukraine, Treasury Secretary Janet Yellen said in an interview with Reuters.
Crude has been caught in a tight range since mid-October, with geopolitical concerns allayed by expectations for a glut next year and a dour outlook from China, the biggest importer. The Asian nation’s regulators over the weekend vowed further action to boost the economy, adding to recent tailwinds for oil prices that include the threat of “maximum pressure” on Iran from President-elect Donald Trump’s pick for national security adviser.
“Supply concerns tied to geopolitical risks are a key upside risk facing oil prices,” said Vivek Dhar, an analyst with Commonwealth Bank of Australia. Still, the outlook is bearish, with Brent likely to fall to $70 a barrel next year “driven by oversupply expectations linked to non‑OPEC+ supply growth eclipsing the increase in global oil consumption.”
Elsewhere, OPEC+ member United Arab Emirates will reduce exports early next year as the producer group seeks stronger discipline in meeting production targets. Abu Dhabi National Oil Co., known as Adnoc, cut the allocation of crude cargoes for some customers in Asia.
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