Oil Prices Uptick First Week on Demand Expectations
Oil prices surge in the first week due to expectation that demand will increase amidst geopolitical pressure on the supply side. Key prices drivers was optimism about increased economic activity in China and the US, the world’s largest oil consumers.
On Friday, Brent rose to $75.48 per barrel, up by around 2.8% relative to the closing price of $73.40 a barrel last week. West Texas Intermediate (WTI), the American benchmark, traded at $72.44 a barrel at the same time on Friday, a rise of about 3.3% from last Friday’s session, which closed at $70.09 per barrel.
Potential shifts in US economic growth following President-elect Donald Trump’s inauguration on Jan. 20 are expected to influence oil prices by driving demand in the world’s largest crude oil consumer.
Trump’s policies are expected to boost US oil and natural gas consumption, easing concerns among market players about demand and driving oil prices higher. Anticipated Federal Reserve (Fed) interest rate cuts, with the first expected later this year, are poised to stimulate the US economy and fuel increased oil demand.
Additionally, data showing a larger-than-expected decline in US crude oil stocks is reinforcing the view that demand is strengthening, which is driving prices higher. The US Energy Information Administration (EIA) announced that commercial crude oil stocks in the country decreased by approximately 1.2 million barrels last week to 415.6 million barrels.
The market expectation was that stocks would decrease by about 2.4 million barrels. Meanwhile, Chinese President Xi Jinping’s pledge to address internal and external economic challenges in 2025 bolsters expectations of increased economic activity and higher oil demand in the world’s top oil importing country.
China’s annual National People’s Congress will convene in Beijing on March 5, where the government will finalize the 2025 national budget and outline key socioeconomic priorities, including economic targets such as GDP growth. Both futures increased on Thursday, supported by a demand surge in the US, the world’s biggest consumer, and a weakening US dollar index.
In the last trading day of the year on Tuesday, oil prices continued to rise, buoyed by strong economic data from China and a weakening US dollar, which has been affected by political uncertainties in the region, while expectations that the US Fed will adopt a more cautious approach to quantitative easing have capped further price increases.
On Monday, prices edged higher in thin holiday trading, as the market awaited further clues on the demand outlook from the world’s largest oil consumers, the US and China, ahead of the year-end. #Oil Prices Uptick First Week on Demand ExpectationsNavy Intercepts Boat Laden with 100,000 litres of Stolen Crude Oil in Ondo
