Oil Prices Little Changed as Markets Weigh Chinese Demand and Interest Rate Expectations
Oil prices settled little changed on Friday as markets weighed Chinese demand and interest rate-cut expectations after data showed cooling U.S. inflation. U.S. West Texas Intermediate crude futures rose 8 cents, or 0.12%, to $69.46 per barrel, while Brent crude futures closed up 6 cents, or 0.08%, at $72.94 a barrel.
The U.S. dollar retreated from a two-year high, but was heading for a third consecutive week of gains, after data showed cooling U.S. inflation two days after the Federal Reserve cut interest rates but trimmed its outlook for rate cuts next year. A weaker dollar makes oil cheaper for holders of other currencies, while rate cuts could boost oil demand.
Chinese state-owned refiner Sinopec said in its annual energy outlook that China’s oil consumption would peak by 2027, as demand for diesel and gasoline weakens. OPEC+ needed supply discipline to perk up prices and soothe jittery market nerves over continuous revisions of its demand outlook.
OPEC+ recently cut its growth forecast for 2024 global oil demand for a fifth straight month. JPMorgan sees the oil market moving from balance in 2024 to a surplus of 1.2 million barrels per day in 2025, as the bank forecasts non-OPEC+ supply increasing by 1.8 million barrels per day in 2025 and OPEC output remaining at current levels.
U.S. President-elect Donald Trump said the European Union may face tariffs if the bloc does not cut its growing deficit with the U.S. by making large oil and gas trades with the world’s largest economy. In a move that could pare supply, G7 countries are considering ways to tighten the price cap on Russian oil, such as with an outright ban or by lowering the price threshold, Bloomberg reported.
Money managers raised their net long futures and options positions in the week to Dec. 17, the U.S. Commodity Futures Trading Commission said on Friday.
