DTN Oil Update
Oil Futures Gain Amid Light Trading Ahead 2025
HOUSTON (DTN) --â?¯Oil futures rose Monday, despite light trading activity seen ahead of the New Year's holiday and as market participants focus on supply and demand fundamentals expected for 2025.
The February NYMEX WTI futures contract rose $0.35 to $70.9543 bbl, while the front-month ICE Brent futures contract advanced $0.16 to $74.33 bbl. January RBOB futures rose $0.0123 to $1.9705 gallon and ULSD futures for January delivery rose $0.0401 to $2.2849 gallon.
Crude futures price increases Monday morning were supported by a larger-than-expected drop of U.S. crude inventories reported by the Energy Information Administration last Friday, Dec. 27.
Commercial crude oil inventories in the U.S. fell by 4.2 million bbl to 416.8 million bbl in the week ended Dec. 20.
Due to strong seasonal demand, distillate fuel stocks and supplies declined by 1.7 million bbl and 2 million to 116.5 million bbl and to 4.3 million bpd, respectively, in the same reference week.
Reports from OPEC and the International Energy Agency, released in early December, anticipated a fall of global oil demand in 2025, led by China, but some analysts believe that this scenario could change as the Chinese government recently committed to implementing a more flexible fiscal policy and to increase spending to boost its economy.
Chinese authorities have agreed toâ?¯issue 3 trillion yuan ($411 billion) of special treasury bonds, as part of China's stimulus plan for next year, according to a Reuters report last week.
Expectations of firm buying interest for crude and oil products in 2025 are also based on expectations of an escalation of the Russia-Ukraine war and regional conflicts in the Middle East.
Additional sanctions on Russian and Iranian crude are also expected to contribute to a global supply tightness.
Domestically, however, concerns of high inflation levels persisting in the U.S. economy next year and the impact on consumer prices resulting from trade tariffs that the upcoming Trump administration is planning to impose on China, Mexico and Canada can overshadow the optimism in the markets in 2025.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
