 "Oil prices set to end year 10% lower as demand concerns snap winning streak")
Crude futures rose slightly on Friday in thin activity on the last trading day of the year.
Both benchmarks are set to end 2023 about 10% lower after two years of gains as geopolitical concerns and oil production cuts drove wild fluctuations in prices.
Brent futures rose 12 cents to $77.27 a barrel at 2:22 p.m. (1922 GMT) on Friday. U.S. West Texas Intermediate crude rose 16 cents to $71.93 a barrel.
Oil prices fell sharply on Thursday as some shipping companies said they would resume movements through the Red Sea, easing supply concerns. Major firms had stopped using Red Sea routes after Yemen's Houthi militant group began targeting vessels.
However, some crude oil and refined product tankers are still opting for the longer route around Africa to avoid potential conflicts in the region.
Geopolitical tensions in the Middle East continued to support prices. On Friday, Israel intensified its attacks in southern Gaza.
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"We are going to see continued volatility as we go into 2024 with the geopolitical events and the fear that the conflict could spread throughout the region," said Andrew Lipow, president of Lipow Oil Associates.
Data released on Friday by the U.S. Energy Information Administration (EIA) that showed strong oil demand in October also offered some support to prices, said UBS analyst Giovanni Staunovo.
Total U.S. oil demand rose 3.4% in October versus the prior year, the report said.
U.S. crude oil output fell slightly in October to 13.248 million barrels per day, after it set monthly records in August and September.
Energy firms this week added oil and natural gas rigs for the first time in three weeks, energy services firm Baker Hughes said in a report on Friday, indicating output could rise in the future.
For the year, however, the rig count was down by 157 after gaining by 193 in 2022 and 235 in 2021.
Both Brent and WTI are on track for their lowest year-end levels since 2020, when the pandemic battered demand and sent prices nose-diving.
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 level since the pandemic on output cuts and Angola's exit from the group.
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.
(Additional reporting by Ahmad Ghaddar, Noah Browning and Sudarshan Varadhan; Editing by Leslie AdlerEditing by Jason Neely and Mark Potter)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)