Oil prices have seen a recent uptick, with Brent crude futures rising by 6 cents to $72.94 per barrel and U.S. West Texas Intermediate (WTI) crude increasing by 8 cents to $69.46 per barrel on December 21, 2024. This rise follows a period of decline attributed to concerns over Chinese demand and expectations surrounding interest rate cuts after the release of cooling U.S. inflation data [1938233e]. The Federal Reserve's recent decision to cut its benchmark interest rate by 25 basis points to a range of 4.25%-4.50% has influenced market sentiment, with forecasts indicating two additional rate reductions in 2025 [12183145].
Earlier in the week, on December 20, oil prices had experienced a notable decline, with Brent crude futures falling by 2.5% to close at $72.88 per barrel and WTI crude dropping to $69.91 per barrel. The market's cautious tone reflected ongoing concerns about inflation and potential economic policies, particularly in light of former President Trump's influence on future economic strategies [157b98f0].
On December 18, oil prices had shown slight increases, with Brent futures rising by 32 cents to $73.51 per barrel and WTI crude climbing 32 cents to $70.40 per barrel as investors remained cautious ahead of the Fed's decision [157b98f0]. However, on December 17, Brent crude futures had fallen by 90 cents (1.2%) to $73.01 per barrel, influenced by negative economic news from Germany and China [22b20c67]. The stabilization of oil prices at approximately $73.20 per barrel is attributed to traders closely monitoring signals from the Federal Reserve regarding interest rates [533033c8].
On December 14, Brent futures had risen by $1.08 (1.5%) to $74.49 per barrel, driven by the European Union's agreement on a 15th sanctions package targeting Russia's shadow tanker fleet, which includes nearly 30 entities and 45 tankers [b3075479]. The U.S. is also considering sanctions on Russian oil exports, while Britain, France, and Germany are prepared to implement 'snap back' sanctions on Iran [8e72c89c].
Recent U.S. inventory data revealed a significant drop of 4.7 million barrels for the week ending December 13, surpassing the anticipated decline of 1.9 million barrels. However, distillate stocks increased by 700,000 barrels, and gasoline inventories rose by 2.4 million barrels, indicating mixed signals in the energy market [533033c8]. Analysts project that U.S. energy firms pulled about 1.6 million barrels from storage, further complicating the market dynamics [157b98f0].
As of December 20, the U.S. oil rig count has increased by one to 483, though this figure is down by 15 compared to the same week last year. Daily crude oil production is approximately 14.04 million barrels per day [9aab397e]. The International Energy Agency (IEA) has raised its 2025 global oil demand growth forecast to 1.1 million barrels per day, reflecting a more optimistic outlook despite the recent downturn in prices [01eb425c][b3075479].
In the backdrop of these developments, Sinopec has indicated that China's crude imports may peak in 2025, with oil consumption projected to rise by 2027 [1938233e]. Additionally, President-elect Donald Trump has threatened tariffs against the EU unless they increase oil and gas purchases from the U.S., further complicating international trade dynamics [1938233e]. The G7 is also considering tightening the price cap on Russian oil, which has been circumvented since the 2022 invasion of Ukraine [1938233e]. As traders await further developments, the interplay of these factors will be crucial in shaping the future of global oil prices.