DTN Oil Update
Oil Futures Mixed Amid High Volatility
HOUSTON (DTN) -- Oil futures were mixed Thursday, reflecting high volatility as the market assessed different reports from the EIA and OPEC, both anticipating weak oil demand for next year.
The International Energy Agency expects world oil demand growth to climb from 840,000 barrels per day (bpd) in 2024 to 1.1 million bpd next year, according to its annual World Energy Outlook report released Thursday.
The agency said global oil demand will be driven by emerging Asian markets, as weak buying interest from China will continue next year.
The report comes one day after OPEC reviewed downward its forecast of oil demand growth for 2024 to 1.61 million bpd and for next year to 1.45 million, on expectations of poor demand from China as well.
However, at the conclusion of a two-day conference in Beijing, China's leaders pledged Thursday to cut interest rates and provide more support to the country's private sector, according to Chinese media reports.
But the secrecy of the specific economic targets discussed in this conference raises more questions about China's economic recovery for next year, especially due to the proximity of trade tariffs that the new administration of U.S. President-elect Donald Trump plans to impose to that country in 2025.
The high volatility seen in oil futures prices Thursday were also attributed to the latest U.S. inflation report, which is expected to support the Federal Reserve's decision to cut interest rates next week to as low 3.0%, according to analysts.
Meanwhile, the Bureau of Labor Statistics reported Thursday that the Producer Price Index PPI for final demand increased 0.4% in November after seasonal adjustment, above 0.3% and 0.2%, seen in October and September, respectively. The index rose 3% year-over-year hitting the largest rise since February 2023.
At 3:30 p.m. EST, WTI futures contract for January delivery fell $0.05 to $70.24 and February Brent was $73.60 barrel (bbl), up $0.08. January RBOB rose $0.0096 to $1.9954 gallon, while ULSD for January delivery edged up $0.0180 to $2.2413 gallon.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
