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

Oil prices have found stability close to their peak levels in almost three months, driven by an increase in demand from Asian refiners for certain Middle Eastern oil grades.

Brent crude remained around $76 per barrel, achieving its highest level since October 14 earlier on Monday. In contrast, West Texas Intermediate was trading at approximately $74. Market observers are eagerly anticipating the official selling prices from Saudi Arabia, the top oil exporter, especially following the surge in Oman and Dubai crude prices at the end of last year, which was prompted by limited supplies from Iran and Russia.

Warren Patterson, head of commodities strategy at ING Groep NV, noted that oil prices “appear to be impacted by the physical market in the Middle East.” He further stated, “Reduced supplies from Iran and Russia have pushed Asian buyers to look for different sources.”

In the past week, oil prices were supported by favorable elements, such as falling U.S. stockpiles and increasing uncertainty as Donald Trump’s potential return to the White House looms. This led to a break from a narrow trading range that had existed since mid-October. Nonetheless, that optimism is being tempered by fears of a possible surplus, the chances of renewed OPEC+ production, and weak demand from China, the leading importer.

A note released on January 5 by Morgan Stanley analysts, including Martijn Rats, indicated that Brent crude is “forecasted to stabilize around $70.” The bank predicts a surplus of roughly 700,000 barrels per day this year, as escalating supplies from OPEC and non-OPEC producers outweigh demand growth.