DTN Oil Update
Oil Futures Dipped, Breaking a 3-Day Gain
Oil futures prices dipped Thursday, breaking a three-day gain and despite expectations of limited supplies resulting from additional sanctions on Russia and a recovery of global demand anticipated by the IEA for this year and 2025.
A 15th package of sanctions, approved Wednesday by EU ambassadors, aims to add more individuals and entities to the already existing list. The sanctions also target a shadow fleet that Russia uses to evade restrictions on transporting oil and fuel, according to the Hungarian presidency of the Council of the European Union.
Meanwhile, the International Energy Agency said world oil demand growth is set to accelerate from 840,000 barrels per day (bpd) in 2024 to 1.1 million bpd next year.
"Total oil supply is on track to increase by 630,000 bpd this year and 1.9 million bpd in 2025, to 104.8 million bpd, even in the absence of unwinding of OPEC+ cuts," according to the most recent Oil Market Report released by the IEA.
But Wednesday the Organization of the Petroleum Exporting Countries showed a more pessimistic outlook by reviewing downward its forecast of oil demand growth for 2024 to 1.61 million bpd from their prior estimate of 1.82 million bpd. For 2025, OPEC expects oil demand to reach 1.45 million bpd, instead of 1.54 million bpd, previously forecasted.
OPEC based its forecast on abundant supplies and sluggish global demand, mainly from China, days after the organization extended voluntary output cuts of 2.2 million bpd until the end of March.
Separately, market participants continue to focus on the next Federal Open Market Committee meeting on Dec. 18, when the Federal Reserve is expected to cut interest rates, which, according to analysts, could be as low as 3% from the current range of 4.5% to 4.75%.
At 9:32 a.m. EST, the front-month WTI futures contract for January delivery fell $0.55 to $69.74 and Brent for February delivery $73.07 barrel (bbl), down $0.45. RBOB for January delivery dropped $0.0108 to $1.9750 gallon, while ULSD for January delivery fell $0.0032 to $2.2201 gallon.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
