DTN Oil Update
Oil Futures Fell Amid Thin Trading Activity
HOUSTON (DTN) -- Crude oil futures prices dropped to start the week on Monday, amid thin trading activity, sluggish demand ahead of the year-end holidays.
The NYMEX WTI futures contract for February delivery fell $0.26 to $69.20 bbl, while February Brent crude contract dropped $0.31 to $72.63.â?¯ January RBOB futures was slightly steady by $0.0002 to $1.9418 gallon while ULSD futures for January delivery fell $0.0003 to $2.2341 gallon.
One week after the Federal Reserve cut U.S. interest rates by 25 basis points (bp) and anticipates there will be less trims to interest rates in 2025, concerns of inflationary pressures persist. These concerns, coupled with the impact that trade tariffs can have on consumers' pockets, maintain a bearish sentiment in the crude oil futures markets.
The outlook of weak global oil demand led by China as the Asian country keeps struggling to increase its domestic consumption is also expected to continue adding more downward pressure on crude prices the rest of the year.
On Friday, the crude oil market reversed the lower trend shown in the week driven by President-elect Donald Trump'sâ?¯statements warning that his administration will impose trade tariffs to European Union countries if they do not buy more U.S. oil and gas.
Trump has also threatened to impose more tariffs on China, and its main trade partners, Mexico and Canada, in 2025.
Separately, Trumpâ?¯suggested Sunday that his new administration could try to regain control of the Panama Canalâ?¯that the U.S. "foolishly" ceded to its Central American ally, contending that shippers are charged "ridiculous" fees to pass through theâ?¯canal, the AP reported.
The Panama Canal Authority PAC recently announced increasing transportation fees due to changes in its reservation system. So far in 2024, the U.S. has represented 75% of the total cargo traffic in the Panama Canal, followed by China with 21.4%, according to PAC data.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
