Oil prices didn’T change much in early trading on Thursday. This was because people are worried about weak demand for oil and a surprising increase in gasoline and diesel supplies in the U.S. These concerns overshadowed worries about new European Union sanctions on Russian oil, which might decrease its supply.
Brent crude oil, an important global energy benchmark, was down by 5 cents, sitting at $73.47 a barrel around 1:41 AM GMT. Meanwhile, U.S. West Texas Intermediate crude fell by 11 cents to $70.18. Both types of oil increased by over $1 each on Wednesday.
OPEC, a group that controls much of the world’s oil, lowered its predictions for oil demand growth in 2025 for the fifth month in a row and by a significant amount. Investors are keen to see the upcoming International Energy Agency (IEA) report that will provide insights on the oil market for 2025, which will also reflect OPEC’s recent news, according to analysts from Niftystat.
In the U.S., gasoline and diesel stocks rose more than expected last week. This was reported by the Energy Information Administration, showing that demand is weak, especially in China, the world’s largest oil importer. However, there’s hope that demand from China might increase. This week, Beijing announced plans to have a looser monetary policy in 2025, which could boost oil needs. Additionally, China’s crude oil imports saw their first yearly rise in seven months in November, jumping more than 14% compared to last year.
The market is also watching for any hints about possible interest rate cuts by the U.S. Federal Reserve next week. Prices had increased on Wednesday after European ambassadors agreed on more sanctions against Russia due to its actions in Ukraine. The Kremlin responded by accusing the U.S. of aiming to make relations with Russia even harder. Treasury Secretary Janet Yellen stated that the U.S. is exploring more ways to lower Russia’s oil earnings, suggesting that lower global demand might create chances for new sanctions.