Oil prices remained stable on Tuesday, largely retaining the gains of the previous day, marked by the fall of Bashar al-Assad's regime, then by the announcement of monetary easing in China to support economic activity in 2025. The price of a barrel of Brent from the North Sea, for delivery in February, gained 0.07% to $72.19. Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in January, gained 0.32%, to $68.59.
Chinese leaders announced on Monday that they wanted “soften” next year their monetary policy and promised a “more proactive budgetary policy” pour «stabiliser» real estate and financial markets. This is the “most direct language on recovery in years from the world’s largest crude oil importer”say DNB analysts. According to them, “Oil demand in China tends to grow again, as part of recovery measures” after six months of low demand. “Weak Chinese demand for crude is why oil has been stuck in its recent price range”said Phil Flynn of Price Futures Group in a note.
“Small geopolitical risk premium”
However, Saudi Aramco, the Saudi national oil company, lowered January 2025 prices for Asian buyers to their lowest level since 2021, “reflecting the tepid demand in the region”estimates John Plassard of Mirabaud. On the geopolitical level, “the overthrow of the Assad regime in Syria raises more questions than it answers”comments Tamas Varga, analyst at PVM, and the uncertainty has led investors to “to cover oneself” in the markets by buying contracts, which caused prices to rise slightly on Monday. “The Syrian situation caused a slight jolt on the market, in particular after the Israeli air force strikes in the country (…) This introduces a small geopolitical risk premium”Robert Yawger, of Mizuho USA, commented to AFP.
On Sunday, Bashar al-Assad, who had been in power for 24 years in Syria, fled the country, driven out by a spectacular offensive by Islamist rebels. The upward trend linked to this news “ended Tuesday at the start of the day”specify Energi Danmark analysts, and the market is now awaiting monthly reports from OPEC and the International Energy Agency on production during the week.
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