Oil Prices Rise on Demand Optimism

Crude oil prices started to trade this week with gains, driven higher by positive factory output data from China and the prospect of continued fighting in the Middle East. At the time of writing, was trading at $72.22 per barrel, with at $68.

36 per barrel, both up from Friday’s close, after the release of the Caixin/S&P Global PMI reading for November. The reading factory output in China had expanded at the fastest rate in five months in November. New orders jumped at the fastest rate since February 2023, Reuters noted in its report on the news.



Meanwhile, Israel began bombing Lebanon again despite the ceasefire that was agreed last week, suggesting the end of that war is nowhere near the horizon. Also in the Middle East, Islamist insurgents entered the Syrian city of Aleppo, reigniting the violence that has plagued the country for years and signaling further instability in the Middle East. Separately, OPEC+ is meeting on Thursday to discuss output and most expect it to delay the rollback of production cuts for next year in light of price levels.

“An indefinite delay may be the best case for oil prices, given that earlier rounds of delays by a month or so have failed to drive higher oil prices in line with what OPEC+ intended,” IG market strategist Yeap Jun Rong told Reuters. In comments on the OPEC conundrum, ING’s Warren Patterson and Ewa Manthey today “The challenge is that the group needs to find a balance between trying to support the market and limiting its loss in market share. Complicating matters still further, some members are still failing to stick to their agreed production levels.

” The other complication is that any return of supply to the market will likely tank prices, Middle Eastern instability, and Chinese demand notwithstanding. This suggests that OPEC+ is stuck with the cuts until such time as other events push prices high enough for the producer group’s comfort. By Irina Slav for Oilprice.

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