Oil Prices Rise Amid Middle East Turmoil, Demand Concerns Persist

Key Highlights -Geopolitical Uncertainty: The ouster of Syrian President Bashar al-Assad raised concerns about regional stability but also brought hopes for potential recovery in Syria's oil production. OPEC+ Policy Adjustment: OPEC+ delayed the start of production increases to April 2025, citing weak global demand and rising output from non-OPEC countries. Demand Weakness: Slowing demand from China, the world’s largest oil importer, weighed on the market despite stimulus measures by the Chinese government. Price Trends: Brent crude rose to $71.48/bbl (+0.51%), and WTI reached $67.58/bbl (+0.57%), while MCX crude opened at 5842 (+0.40%).

Oil Prices Edge Up Amid Syrian Turmoil

• Oil prices climbed on Monday after the fall of Syrian President Bashar al-Assad's regime introduced greater uncertainty to the Middle East, although the gains were capped by a waning demand outlook for the coming year.
• Brent crude futures rose 36 cents, or 0.51%, to $71.48 per barrel by 0513 GMT. U.S. West Texas Intermediate (WTI) crude futures gained 38 cents, or 0.57%, to $67.58 per barrel. MCX crude oil prices opened at 5842 with a gain of 0.40%.

OPEC+ Extends Output Cuts to Counter Demand Slump

• Syrian rebels announced on state television on Sunday they had ousted President al-Assad, eliminating a 50-year family dynasty in a lightning offensive that raised fears of a new wave of instability in a region already gripped by war.

• Saudi Aramco, the world's biggest crude oil exporter, has reduced its January 2025 prices for Asian buyers to the lowest level since early 2021, it said on Sunday, as weak demand from top importer China weighs on the market.

• On Thursday, the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, pushed back the start of oil output increases by three months until April, and extended the full unwinding of production cuts by a year until the end of 2026.

• OPEC+, responsible for about half of the world's oil output, was planning to start unwinding cuts from October 2024, but a slowdown in global demand - especially from top crude importer China - and rising output elsewhere have forced it to postpone the plan several times.

• The number of oil and gas rigs deployed in the United States last week also hit the highest since mid-September, pointing to rising output from the world's biggest crude producer.

Petroleum News: China’s Weak Inflation Data Caps Oil Gains

• With a supply surplus looming next year, both Brent and WTI posted losses for the past two straight weeks.
• As prices slid, money managers raised their net long U.S. crude futures and options positions in the week to Dec. 3, the U.S. Commodity Futures Trading Commission said on Friday.
• Investors are bracing for a data-packed week, including a key U.S. inflation report on Wednesday that will provide more clues for the Federal Reserve's plans for interest rates.
• The latest developments in Syria increased the instability in West Asia region as the ouster of Bashar al-Assad would limit the control of Iran in West Asia region.
• Market players are now watching how the regime change in Syria will impact the oil production in the region. Market reports said oil production was almost eroded in Syria due to the long-running civil war in that country. Market players hope that oil production could increase under a moderate government in Syria.
• Increase in crude oil prices was limited by latest data on inflation in China. According to the National Bureau of Statistics of China, annual inflation rate declined to 0.2 per cent in November 2024 from 0.3 per cent in October. Market was forecasting it at 0.5 per cent.

Expert Opinion: Market Eyes Syria’s Oil Prospects Post-Regime Change

• Market reports said the slowdown highlighted mounting deflation risks in China despite recent stimulus measures from the government and a supportive monetary policy stance by the Chinese central bank.
• China is one of the major consumers of crude oil in the global market. Bearish trend is expected for the upcoming period, supported by the negative pressure formed by the EMA50, taking into consideration that breaching 68.64$ will stop the bearish wave and lead the price to start recovery attempts on the intraday basis.