Oil Remains Near October Highs Driven by Strong Middle East Markets -

Oil prices have found stability near their highest levels in almost three months, driven by increased demand from Asian refiners for specific Middle Eastern oil grades.

Brent crude prices lingered around $76 per barrel, reaching their highest point since October 14 earlier in the day. Meanwhile, West Texas Intermediate was trading at about $74. Market participants are closely monitoring the official selling prices from Saudi Arabia, the top exporter, especially following a spike in Oman and Dubai crude prices at the end of last year due to restricted supply from Iran and Russia.

Warren Patterson, the head of commodities strategy at ING Groep NV, stated that oil prices “appear to be affected by the physical market in the Middle East.” He went on to say, “Reduced supplies from Iran and Russia have driven Asian buyers to explore alternative sources.”

Last week, a variety of favorable conditions, including decreasing US stockpiles and growing uncertainty surrounding Donald Trump’s potential return to the presidency, contributed to rising oil prices. This prompted a breakout from a narrow trading band that had persisted since mid-October. However, this positivity is being moderated by fears of a possible surplus, a revival of suspended OPEC+ production, and sluggish demand from China, the largest importer.

A recent note from Morgan Stanley analysts, including Martijn Rats, dated January 5, asserts that Brent crude is “expected to stabilize around $70.” The bank foresees a surplus of roughly 700,000 barrels per day this year, as increased supply from both OPEC and non-OPEC producers exceeds the growth in demand.