Oil futures managed to gain some ground on Monday, recovering a small portion of the losses they experienced at the end of last week. Despite consistent headwinds and concerns over demand, there are still reasons for optimism in the market.
According to Robbie Fraser, manager of Global Research & Analytics at Schneider Electric, geopolitical risk premiums have been discounted by the crude complex over the past two weeks. This, coupled with demand concerns, has created potential risks for a drop in oil prices.
However, there are positive factors to consider as well. The most significant supply factor is the production cuts implemented by Saudi Arabia and Russia. Both countries have confirmed their plans to maintain these output cuts through the end of the year, which aligns with consensus expectations.
In light of these developments, December West Texas Intermediate crude saw a modest increase. It rose by 31 cents, or 0.4%, settling at $80.82 a barrel on the New York Mercantile Exchange. Although it fell short of the session’s high of $82.24, this uptick is a positive sign amidst recent market fluctuations.
