The global energy market is entering the Christmas holiday period on a high note, with crude oil prices recording their highest levels in the past two weeks. This rally is driven by a confluence of two factors: optimistic economic data from the United States and growing supply concerns stemming from geopolitical hotspots.
In trading on Wednesday (Dec. 24), North Sea Brent crude rose approximately 0.5%, trading around $62.70 per barrel, while U.S. West Texas Intermediate (WTI) also edged up past the $58.50 mark. This marks the sixth consecutive session of gains, signaling an impressive recovery streak since mid-December.
Momentum from the world’s largest economy
Investor sentiment was strongly bolstered after the latest reports showed the U.S. economy growing at its fastest pace in two years. U.S. GDP in the third quarter achieved impressive growth (approximately 4.3%), far exceeding previous forecasts. Strong purchasing power among American consumers has kindled hopes that energy demand will not weaken as previously feared.
Geopolitical specter overshadows oversupply pressure
Although data from the American Petroleum Institute (API) indicated that U.S. crude inventories rose by 2.4 million barrels last week, a signal that typically pulls oil prices down, the market appeared to brush off this figure to focus on supply risks.
The spotlight is on Venezuela, where tensions have escalated after Washington tightened blockades on the South American nation’s oil tankers. The U.S.’s move to list the Maduro administration on a special monitoring list and intercept transport vessels has raised fears of supply disruptions from a member of OPEC with significant reserves.
Simultaneously, the situation in Eastern Europe shows no signs of cooling down. Drone attacks targeting Russia’s “shadow fleet” in the Mediterranean and the stalemate in peace negotiations have forced traders to add a “risk premium” to oil prices.
Long-term outlook remains challenging
Despite this short-term rally, analysts warn that the oil market is heading toward its worst annual decline since the 2020 pandemic. The core cause remains global oversupply.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to a slight production increase of 137,000 barrels per day this December, but have also signaled a pause in production hikes in the first quarter of 2026 due to seasonal factors. Experts from major banks forecast that while the oil surplus may narrow by late 2026, price pressure in the first half of the coming year will remain significant.
Closing the pre-Christmas trading session, the commodities market also saw gold soar as the precious metal surpassed the $4,500/oz mark, continuing its role as a safe-haven asset amidst global instability.