By Colleen Howe and Jeslyn Lerh
SINGAPORE (Reuters) -Oil costs fell on Friday on worries about demand development in 2025, particularly in high crude importer China, placing world oil benchmarks on monitor to finish the week down almost 3%.
Brent crude futures fell by 41 cents, or 0.56%, to $72.47 a barrel by 0420 GMT. U.S. West Texas Intermediate crude futures fell 39 cents, or 0.56%, to $68.99 per barrel.
Chinese state-owned refiner Sinopec stated in its annual power outlook, launched on Thursday, that China’s crude imports might peak as quickly as 2025 and the nation’s oil consumption would peak by 2027 as diesel and gasoline demand weaken.
“Benchmark crude costs are in a protracted consolidation section because the market head in the direction of the 12 months finish weighed by uncertainty in oil demand development,” stated Emril Jamil, senior analysis specialist at LSEG.
He added that OPEC+ would require provide self-discipline to perk up costs and soothe jittery market nerves over steady revisions of its demand development outlook. The Organization of the Petroleum Exporting Countries and allies, collectively referred to as OPEC+, just lately lower its development forecast for 2024 world oil demand for a fifth straight month.
Meanwhile, the greenback’s climb to a two-year excessive additionally weighed on oil costs, after the Federal Reserve flagged it might be cautious about reducing rates of interest in 2025.
A stronger greenback makes oil costlier for holders of different currencies, whereas a slower tempo of price cuts might dampen financial development and trim oil demand.
J.P. Morgan sees the oil market transferring from steadiness in 2024 to a surplus of 1.2 million barrels per day (bpd) in 2025, because the financial institution forecasts non-OPEC+ development rising by 1.8 million bpd in 2025 and OPEC output remaining at present ranges.
In a transfer that would pare provide, G7 international locations are contemplating methods to tighten the worth cap on Russian oil, resembling with an outright ban or by decreasing the worth threshold, Bloomberg reported on Thursday.
Russia has evaded the $60 per barrel cap imposed in 2022 utilizing its “shadow fleet” of ships, which the EU and Britain have focused with additional sanctions in latest days.
(Reporting by Colleen Howe in Beijing and Jeslyn Lerh in Singapore; Editing by Sonali Paul)
