Written by Paul Karsten
LONDON (Reuters) – Crude oil prices fell on Friday on concerns about rising demand in 2025, particularly in top importer China, with global oil benchmarks expected to end the week down more than 3%. Ta.
Brent crude oil futures fell 76 cents, or 1.0%, to $72.12 a barrel by 1117 GMT. U.S. West Texas Intermediate crude oil futures also fell 76 cents, or 1.1%, to $68.62 a barrel.
China’s oil imports will peak as early as 2025, due to a decline in demand for diesel and gasoline, and the country’s oil consumption will rise by 2027, China’s state-run oil refiner Sinopec said in its annual energy outlook released Thursday. He said it could reach its peak.
“Baseline oil prices are in an extended period of consolidation as the market heads into the year-end weighing on uncertainty about oil demand growth,” said Emril Jamil, senior research specialist at LSEG.
He added that OPEC+ will need supply discipline to raise prices and calm market jitters over continued revisions to the demand growth outlook. The Organization of the Petroleum Exporting Countries and its allies (collectively known as OPEC+) recently revised down their forecast for global oil demand growth in 2024 for the fifth straight month.
JPMorgan expects non-OPEC+ supplies to increase by 1.8 million barrels per day in 2025 and OPEC production to remain at current levels, pushing the oil market from equilibrium in 2024 to increasing by 1.8 million barrels per day in 2025. It is expected to move to a surplus of 1.2 million barrels.
Meanwhile, the U.S. dollar rose to a two-year high after the U.S. Federal Reserve expressed caution about lowering interest rates in 2025, weighing on oil prices.
While a stronger dollar would raise oil prices for holders of other currencies, a slower rate of interest rate cuts could slow economic growth and reduce oil demand.
US President-elect Donald Trump said on Friday that the European Union would face tariffs if it did not reduce its growing deficit with the US through large oil and gas deals with the world’s largest economy. He said it was possible.
In a move that could reduce supplies, G7 countries are considering ways to tighten price caps on Russian oil, including a blanket ban or lower price standards, Bloomberg reported on Thursday.
Russia is using a “shadow fleet” of ships that have been targeted by the EU and UK with additional sanctions in recent days to avoid a $60 per barrel cap imposed in 2022.
(Reporting by Paul Karsten in London, Colleen Howe in Beijing and Jeslyn Rah in Singapore; Editing by Muralikumar Anantharaman and Kirsten Donovan)
