Oil prices slipped on Tuesday following a US government forecast of steady US oil demand in 2025, but the decline was limited by new US sanctions on Russian oil exports to key buyers India and China.
US West Texas Intermediate (WTI) crude fell 80 cents, or 1.01%, to $78.02 a barrel, while Brent futures were down 66 cents, or 0.81%, to $80.35 a barrel by 11:22 CST.
The US Energy Information Administration said oil demand in the US would remain steady at 20.5 million barrels per day in 2025 and 2026, but oil output for the nation would rise to 13.55 million barrels per day, an increase on the agency’s previous forecast of 13.52 million barrels per day for this year.
Phil Flynn, senior analyst with Price Futures Group, said markets were anticipating the EIA short-term energy outlook to see if a predicted gain in supply would be reversed. He added that analysts were still expecting a significant price impact on Russian oil supplies from the fresh sanctions, but the effect on the physical market could be less pronounced than what the affected volumes might suggest.
ING analysts estimated the new sanctions had the potential to erase the entire 700,000-barrel surplus they had forecast for this year, but said the real impact could be lower. “The actual reduction in flows will likely be less, as Russia and buyers find ways around these sanctions,” they said in a note.
The uncertainty about demand from major buyer China could blunt the impact of the tighter supply. China’s imports fell in 2024 for the first time in two decades outside of the COVID-19 pandemic, official data showed on Monday.