By The Rio Times | Created at 2024-12-12 21:34:00 | Updated at 2024-12-13 01:00:49
3 hours ago
The global oil market experienced a volatile day on Thursday, December 12, 2024. Crude oil futures closed lower after the International Energy Agency (IEA) revised its forecast for global oil demand.
This downturn followed substantial gains in the previous session. The West Texas Intermediate (WTI) crude for January delivery fell by 0.38% to $70.02 per barrel on the New York Mercantile Exchange.
Brent crude for February delivery on the Intercontinental Exchange dropped 0.15% to $73.41 per barrel. The IEA‘s revised outlook played a significant role in the market’s behavior.
The agency lowered its estimates for oil demand in the current year. However, it raised projections for 2025, citing the impact of China’s economic stimulus measures.
Despite the upward revision for 2025, the IEA cautioned that growth would likely remain moderate. The agency now anticipates global demand to increase by 1.1 million barrels per day in 2025, up from its previous forecast of 990,000 barrels per day.
Oil Prices Dip as IEA Forecast Tempers Russian Sanctions Concerns. (Photo Internet reproduction)Geopolitical risks continue to influence market sentiment. Investors are closely monitoring the tightening of U.S. sanctions against Russia. This factor had contributed to the previous day’s price surge.
Oil Market Outlook
Market participants are also factoring in expectations of a potential interest rate cut by the Federal Reserve. Many anticipate a 25 basis point reduction in the coming week, which could impact oil prices.
Looking ahead, analysts from OCBC Bank suggest that oil prices may face downward pressure in the coming year. They attribute this to an expected build-up in global inventories, which could offset any upward price momentum.
China’s oil demand remains a key factor in the global outlook. OCBC analysts warn that disappointing demand from China could weigh on global growth prospects for 2025.
The oil market continues to balance multiple factors. These include geopolitical tensions, economic forecasts, and shifting demand patterns. As always, market participants must navigate these complex dynamics with caution and foresight.
