(Bloomberg) -- Oil was steady after three days of advances, as the US looks increasingly likely to further sanction Russia’s and Iran’s energy sectors.
Brent traded above $73 a barrel after rising 3.4% in the week’s first three sessions, while West Texas Intermediate held above $70. US Treasury Secretary Janet Yellen said that relatively low prices might allow further action against Russia’s energy sector, as the Biden administration is said to weigh new, harsher sanctions.
Meanwhile, Donald Trump’s pick for national security adviser said that the incoming administration will apply maximum pressure on Iran, including constraining the Islamic Republic’s oil revenues.
Oil has traded in a tight range over the past two months, buffeted by geopolitical shocks and prospects that waning demand, including in top crude importer China, will lead to a glut next year. It found some support from wider markets on Wednesday, after benign US inflation data supported expectations for an interest rate cut in the largest oil consumer this month.
“Talk of further sanctions is providing some support,” said Warren Patterson, head of commodities strategy at ING Groep NV. “While we have seen some strength in oil in recent days, we are still stuck in a fairly narrow range. Rangebound trading and low volatility is no surprise given expectations for a comfortable oil balance through 2025.”
On Wednesday, OPEC again cut its projections for global demand growth this year and next, ahead of a market outlook by the International Energy Agency later on Thursday. Meanwhile, official US data pointed to a big draw in inventories at Cushing, Oklahoma — the delivery point for WTI — but also showed production rising to a new peak.
In China, the two-day Central Economic Work Conference is expected to conclude on Thursday after positive signals from the Politburo on Monday. If Beijing indicates the 2025 growth goal will be close to the 2024 target of about 5%, it could reinforce the Politburo’s message that stronger policy support is coming, according to Bloomberg Intelligence.
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