Oil Prices Hold Steady Near $95 After 5-Day Rally on US Demand, Geopolitical Jitters

Your holiday travel budget is under pressure. International oil prices are taking a breather after a tense five-day rally that pushed crude to multi-month highs. According to Reuters, the recent surge was fueled by a combination of strong U.S. economic data and renewed geopolitical tensions, but momentum appears to be stalling as traders assess the next move.

West Texas Intermediate (WTI), the U.S. benchmark, stabilized around $95 per barrel. This comes after a significant climb of approximately 7% over the previous five trading sessions. Brent crude, the international benchmark, mirrored this trend, holding onto its recent gains.

A Tale of Two Drivers: Demand and Supply

The rally was driven by bullish signals from both sides of the market equation. On the demand side, robust economic indicators from the United States painted a picture of resilient consumption. Better-than-expected retail sales and industrial production figures bolstered expectations for solid energy demand through the end of the year. This sentiment was amplified by a report from the U.S. Energy Information Administration (EIA) showing a larger-than-anticipated drop in domestic crude inventories.

On the supply side, geopolitical jitters in the Middle East have returned to the forefront. Reports of renewed friction in nuclear negotiations involving Iran raised concerns about potential disruptions to global oil flows. The market is also closely watching for any new signals from OPEC+ regarding its production policy.

What's Next? A Tug-of-War for Oil

Analysts suggest the market may enter a period of consolidation as bullish and bearish forces clash. Headwinds include persistent fears of a global economic slowdown and a strong U.S. dollar, which makes oil more expensive for holders of other currencies. However, supportive factors like rising demand for heating oil during the winter and ongoing supply risks are expected to provide a floor for prices.