Oil prices fall amid weak demand in China
Kyiv • UNN
Brent and WTI crude oil fell by 0.9% due to weak demand in China and a 4.6% decline in refining. The IEA predicts an excess of supply over demand by 2025, despite the OPEC+ cuts.
Oil prices fell on Friday amid signs that demand in China, the world's largest oil importer, continues to lag amid an uneven economic recovery, Reuters reported, UNN wrote.
Details
Futures for Brent crude oil fell 65 cents, or 0.9%, to $71.91 per barrel at 06:50 Kyiv time. Futures for WTI crude oil fell 62 cents, or 0.9%, to $68.08.
Over the week, Brent is expected to fall by 2.7% and WTI by 3.3%.
"Although oil prices have stabilized somewhat near the $71.00 support level this week, the lack of a specific catalyst for the upside suggests that the price recovery remains sluggish for now," said Yep Jun Rong, market strategist at IG, in an email.
The prospect of higher supplies from the US and OPEC+, as well as doubts about China's economic recovery, continue to be a concern, while the chances of a December rate cut are now "closer to a coin flip" with less dovish Federal Reserve policy, Yip added.
China's refineries processed 4.6% less crude oil in October than a year earlier, a seventh month of year-on-year declines, amid some plant closures and declining operating performance at small independent refineries, data from the National Bureau of Statistics showed on Friday.
The slowdown was due to a slowdown in China's industrial production growth last month, and demand problems in the real estate sector showed no signs of abating despite rising consumer spending, government data showed.
Oil prices also fell this week, as major forecasters indicated that market fundamentals remain weak.
Addendum
The International Energy Agency predicts that global oil supply will exceed demand in 2025, even if cuts by OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies such as Russia, continue, as production growth in the United States and other producers outpaces sluggish demand.
The Paris-based agency raised its demand growth forecast for 2024 by 60,000 barrels to 920,000 barrels per day and left its forecast for oil demand growth in 2025 unchanged at 990,000 barrels per day.
This week, OPEC lowered its forecast for global oil demand growth for this year and 2025, emphasizing the weakness of China, India and other regions, marking the fourth consecutive downward revision of its 2024 forecast by the producer group.
