Brent crude futures were up 48 cents, or 0.6%, at $77.63 a
barrel at 0523 GMT on Friday, the last trading day of 2023, while the U.S. West
Texas Intermediate (WTI) crude futures were trading 37 cents, or 0.5% higher,
at $72.14.
On Friday, oil prices stabilised 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.
Still, both benchmarks are on track to close at the lowest
year-end levels since 2020, when the pandemic battered demand and sent prices
nosediving.
Production cuts by the OPEC+ have proved insufficient to
prop up prices, with the benchmarks declining nearly 20% from their highest
level this year.
Oil's weak year-end performance contrasts with global
equities, which are on track to end 2023 higher.
The MSCI equity index (.MIWD00000PUS), which tracks shares
in 47 countries, is up about 20% from the beginning of the year, 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 rooted on the back
foot and headed for a 2% decline this year after two years of strong gains.
The expected interest rate cuts, which could reduce consumer
borrowing costs in major consuming regions, and a weaker dollar, which makes
oil less expensive for foreign purchasers, could boost demand in 2024, industry
officials say.
A Reuters survey of 30 economists and analysts forecasts Brent crude to average $84.43 a barrel in 2024, compared with an average of around $80 a barrel this year and the highs of over $100 in 2022 after Russia's invasion of Ukraine. -Reuters
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