Oil prices rose 1 percent in thin trade ahead of the holidays, according to Reuters

By Leila Kearney and Paul Karsten

NEW YORK/LONDON (Reuters) – Oil prices rose more than 1% on Tuesday, reversing losses on a short-term upbeat outlook as trading slowed ahead of the Christmas and Hanukkah holidays.

Futures settled at $73.58, up 95 cents, or 1.3 percent. U.S. West Texas Intermediate crude futures settled at $70.10, up 86 cents, or 1.2 percent.

FGE analysts said they expect benchmark prices to remain unchanged at current levels in the near term, “as activity in paper markets slows over the holiday season and market participants remain on the sidelines until they get a clear view of the global oil balance in 2024 and 2025.” “

Supply and demand changes in December are supportive of current low poverty views, FGE analysts said in a note.

“Given how short the paper market is in terms of positioning, any supply disruption could lead to higher peaks in the structure,” he said.

Some analysts have pointed to signs of higher oil demand in the next few months.

“The year ends with major agencies agreeing that long liquidity balances will begin to deteriorate in 2025,” said Neil Crosby, vice president of fuel analysis for Sparta Products.

“The EIA’s short-term energy outlook has recently turned their 2025 liquidity into a draw, although they will continue to restore some OPEC+ barrels next year,” Crosby said.

Oil and distillate stocks fell by 3.2 million barrels and 2.5 million barrels respectively last week, while gasoline stocks rose last week, according to figures from the American Petroleum Institute. Gasoline inventories rose by 3.9 million barrels.

The figures come ahead of data from the Energy Information Administration, the US Energy Department’s statistical arm, at 1 pm EST (1800 GMT) on Friday.

Also supportive of rates was China’s plan to issue 3 trillion yuan ($411 billion) of special treasury bonds next year as Beijing embarks on a fiscal stimulus to revive its faltering economy.

Chinese stimulus is likely to provide support for WTI crude near $67 per barrel, said Kelvin Wong, senior market analyst at ONDA.

Markets also looked at mixed data from the US economy, the world’s biggest oil consumer.

While consumer confidence weakened in December, new orders for key U.S. manufactured capital goods in November led to strong demand for machinery and a rebound in new home sales, suggesting the U.S. economy was on solid footing as the year closed.

US markets will be closed on Wednesday, December 25 and there will be no global oil market report for the day.