Crude oil prices held gain in early Europe trading as Asian investors gave the commodity a solid start to the week on expectations that supply is set to match demand early next year and open into a gap favoring producers by the end of the first quarter.
On the New York Mercantile Exchange, crude oil for delivery in February gained 0.36% to $53.14 a barrel. On the ICE Futures Exchange in London, Brent oil for February delivery rose 0.34% to $55.40 a barrel.
Wildcards for the supply picture include prospects of a major stream of export crude from Libya, which is exempt from OPEC curbs of 1.2 million barrels per day starting in January. As well as prospects that adherence to the planned OPEC cuts and a related effort to trim 558,000 bpd by non-OPEC producers may fall short. However, analysts are upbeat heading into the New Year.
“There are some geopolitical tensions in the South China Sea,” said Charles Zizemore, chief investment officer of Sizemore Capital. “Combined with production curbs, oil remains supported.