Oil Prices Slip on Demand Concerns

20 Dec 2024 , 10:22 AM

Global oil benchmarks are expected to close the week down around 3% as a result of Friday’s decline in oil prices due to concerns about demand growth in 2025, particularly in China, the world’s largest importer of crude.

Brent crude futures dropped 41 cents, or 0.56%, to $72.47 a barrel. At $68.99 a barrel, U.S. West Texas Intermediate crude futures dropped 39 cents, or 0.56%.

In its annual energy outlook, which was made public on Thursday, China’s state-owned refiner Sinopec predicted that as demand for gasoline and diesel declines, the country’s oil consumption will peak by 2027 and that its crude imports could peak as early as 2025.

Following the Federal Reserve’s warning that it would be cautious about lowering interest rates in 2025, the dollar’s ascent to a two-year high also had an impact on oil prices.

For holders of other currencies, a higher dollar raises the price of oil, and slower rate reduction may impede economic expansion and reduce demand for oil.

Bloomberg said Thursday that G7 nations are thinking about measures to tighten the price ceiling on Russian oil, including lowering the price barrier or outright banning it, in a move that may reduce supplies.

Russia has used its “shadow fleet” of ships, which the EU and Britain have targeted with additional sanctions in recent days, to circumvent the $60 per barrel quota set in 2022.

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