Crude Oil Rallies on Geopolitical Tensions and Energy Demand Optimism

Core Viewpoint - Crude oil and gasoline prices are rising, driven by geopolitical tensions and market confidence, despite some bearish signals from major producers [2][3][4]. Group 1: Price Movements - January WTI crude oil is up by 0.41 (+0.69%), while January RBOB gasoline is up by 0.0093 (+0.51%) [1]. - Crude oil prices have reached a two-week high, supported by ongoing geopolitical risks and a rally in the S&P 500, which indicates confidence in economic outlook and energy demand [2]. Group 2: Geopolitical Factors - The ongoing war in Ukraine is maintaining sanctions on Russian energy exports, contributing to higher crude prices [2]. - Russian President Putin has threatened to attack ships aiding Ukraine, and recent drone attacks on Russian tankers in the Black Sea have heightened geopolitical risks [3]. Group 3: Supply Dynamics - Reduced crude exports from Russia are supporting prices, with shipments falling to 1.7 million barrels per day (bpd) in early November, the lowest in over three years [5]. - Ukrainian attacks on Russian refineries and infrastructure have exacerbated the fuel crunch in Russia, limiting its crude export capabilities [5]. - New US and EU sanctions on Russian oil companies and infrastructure have further curtailed Russian oil exports [5]. Group 4: Market Signals - Saudi Aramco has cut the price of its Arab Light crude oil for Asian customers by 30 cents per barrel for January delivery, indicating weakened energy demand [4]. - The rise in crude prices followed a technical buying trigger after prices surpassed the 50-day moving average [2].