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On
Friday, oil climbed after falling 3% the previous day as more
shipping firms prepared to transit the Red Sea route. Major
firms had stopped using Red Sea routes after Yemen's Houthi
militant group began targeting vessels.
Brent crude futures were up 58 cents, or 0.8%, at $77.73 a
barrel at 1113 GMT, the last trading day of 2023, while U.S.
West Texas Intermediate (WTI) crude futures were up 42 cents, or
0.6%, at $72.19.
Yet the two benchmarks are on track for their lowest year-end
levels since 2020, when the pandemic battered demand and sent
prices nosediving.
Production cuts by the Organization of the Petroleum Exporting
Countries and allies led by Russia, or OPEC+, have proved
insufficient to prop up prices, with the benchmarks down nearly
20% from the year's highs.
OPEC+ is currently cutting output by around 6 million barrels
per day representing about 6% of global supply.
OPEC is facing weakening demand for its crude in the first half
of 2024 just as its global market share declines to the lowest
since the COVID-19 pandemic on output cuts and member Angola's
exit.
A Reuters survey of 34 economists and analysts forecast Brent
crude would average $82.56 in 2024, down from November's $84.43
consensus, as they predicted weak global growth would cap
demand, while geopolitical tensions could provide support.
Oil's weak year-end performance contrasts with global equities,
which are on track to end 2023 higher.
The MSCI equity index, which tracks shares in 47 countries, is
up about 20% as investors ramp up bets on rapid-fire rate cuts
from the U.S. Federal Reserve next year.
In the currency market, the dollar was on the back foot and
headed for a 2% decline this year after two years of strong
gains.
(Additional reporting by Sudarshan Varadhan in Singapore;
editing by Jason Neely)
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