Oil falls on demand growth concerns, robust dollar

By Jeslyn Lehrh

SINGAPORE (Reuters) – Oil prices fell on Friday on concerns about rising demand in 2025, particularly in top crude importer China, putting global oil benchmarks on track to end the week down nearly 3%.

Brent oil futures (BZ=F) was down 33 cents, or 0.45%, at $72.55 a barrel by 0730 GMT.U.S. West Texas Intermediate crude futures were down 32 cents, or 0.46%, at $69.06 a barrel. per barrel.

China’s state-run oil refiner Sinopec said in its annual energy forecast released on Thursday that China’s crude imports could peak as early as 2025 and the country’s oil consumption will peak by 2027 as demand for diesel and gasoline weakens.

“Benchmark crude prices are in a prolonged consolidation phase as the market heads into the end of the year, which weighs on uncertainty over oil demand growth,” said Emril Jamil, senior research specialist at LSEG.

He added that OPEC+ would require supply discipline to lift prices and calm market nerves as the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, recently cut global oil demand growth in 2024 for the fifth consecutive month. the forecast.

Meanwhile, the dollar’s rise to a two-year high also weighed on oil prices after the Federal Reserve said it would be cautious about cutting interest rates in 2025.

A stronger dollar makes oil more expensive for holders of other currencies, while a slower rate of devaluation could dampen economic growth and reduce oil demand.

JPMorgan sees the oil market moving from balance in 2024 to a 1.2 million bpd surplus in 2025 as the bank forecasts non-OPEC+ supply to rise by 1.8 million bpd in 2025 and OPEC production will remain at the current level.

The G7 countries are discussing ways to tighten the price ceiling on Russian oil, such as an outright ban or lowering the price ceiling, Bloomberg reported Thursday.

Russia has circumvented the $60-a-barrel limit set for 2022 by using its “shadow fleet” of ships, which the EU and Britain have targeted for further sanctions in recent days.

(Reporting by Colin Howe in Beijing and Jesslyn Lehrh in Singapore; Editing by Sonali Paul and Muralikumar Anantharaman)