(Kyiv) – Oil prices showed minimal changes on December 12, 2024, due to forecasts of weak demand and higher-than-expected gasoline and distillates inventories in the U.S.
Oil prices remained relatively stable on December 12, 2024, with minor increases in Brent and West Texas Intermediate (WTI) futures. Brent crude rose by 14 cents, reaching $73.66 per barrel, while WTI increased by 6 cents to $70.35 per barrel. Both benchmarks had gained over $1 each on the previous day.
The market is being influenced by forecasts of weaker demand, with the Organization of the Petroleum Exporting Countries (OPEC) revising down its demand growth projections for 2025 for the fifth consecutive month. This revision followed a larger-than-expected increase in gasoline and distillate inventories in the U.S.
Analysts from ANZ noted that investors will be watching closely for the International Energy Agency’s (IEA) market balance assessment for 2025, following OPEC’s recent announcement. According to the U.S. Energy Information Administration (EIA), the recent increase in U.S. fuel inventories was driven by weak demand, especially from China, the world’s largest importer of oil. Additionally, an increase in oil supply outside the OPEC+ group has further pressured prices.
Despite this, investors are hopeful for increased demand in China in 2025, fueled by potential “soft” monetary policies aimed at stimulating the economy, which could also boost oil consumption.
JPMorgan analysts indicated that global oil demand has grown more slowly than expected this month, but it has remained steady overall. They noted a slight decrease in aviation fuel consumption in most countries, which contributed to the softened demand.
Looking ahead, the market will closely monitor any signals from the U.S. Federal Reserve regarding potential interest rate cuts, which could affect oil prices.
Oil prices had risen earlier in the week after the European Union’s ambassadors approved a 15th sanctions package targeting Russia over its invasion of Ukraine. The sanctions aimed at Russia’s “shadow fleet” of ships, which helped circumvent the G7’s price cap of $60 per barrel on Russian seaborne crude, allowing Russia to continue exporting oil.
U.S. Treasury Secretary Janet Yellen also stated that the U.S. is seeking creative ways to reduce Russia’s oil revenue, with the global demand slowdown providing an opportunity to impose additional sanctions.
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