Oil falls on demand growth concerns, robust dollar
Shafaq News/Oil prices fell on Friday on worries about demand growth in 2025, especially intop crude importer China, putting global oil benchmarks on track to end theweek down nearly 3%.
Brent crudefutures fell by 41 cents, or 0.56%, to $72.47 a barrel by 0420 GMT. U.S. WestTexas Intermediate crude futures fell 39 cents, or 0.56%, to $68.99 per barrel.
Chinesestate-owned refiner Sinopec said in its annual energy outlook, released onThursday, that China's crude imports could peak as soon as 2025 and thecountry's oil consumption would peak by 2027 as diesel and gasoline demandweaken.
"Benchmark crude prices are in a prolongedconsolidation phase as the market head towards the year end weighed byuncertainty in oil demand growth," said Emril Jamil, senior researchspecialist at LSEG.
He added that OPEC+ would require supply discipline to perkup prices and soothe jittery market nerves over continuous revisions of itsdemand growth outlook. The Organization of the Petroleum Exporting Countriesand allies, together called OPEC+, recently cut its growth forecast for 2024global oil demand for a fifth straight month.
Meanwhile, the dollar's climb to a two-year high alsoweighed on oil prices, after the Federal Reserve flagged it would be cautiousabout cutting interest rates in 2025.
A stronger dollar makes oil more expensive for holders ofother currencies, while a slower pace of rate cuts could dampen economic growthand trim oil demand.
J.P. Morgan sees the oil market moving from balance in 2024to a surplus of 1.2 million barrels per day (bpd) in 2025, as the bankforecasts non-OPEC+ growth increasing by 1.8 million bpd in 2025 and OPECoutput remaining at current levels.
In a move that could pare supply, G7 countries areconsidering ways to tighten the price cap on Russian oil, such as with anoutright ban or by lowering the price threshold, Bloomberg reported onThursday.
Russia has evaded the $60 per barrel cap imposed in 2022using its "shadow fleet" of ships, which the EU and Britain havetargeted with further sanctions in recent days.
(Reuters)
