Oil prices stabilize as sanctions against Russia tighten
12 December 2024 10:16
On Thursday, oil prices remained stable due to forecasts of weak demand and an increase in US gasoline and distillate stocks that exceeded expectations. At the same time, the market was supported by new EU sanctions against Russian oil, reports "Komersant Ukrainian" reports with reference to Reuters.
As of 8 a.m. Kyiv time, Brent crude oil futures rose 14 cents to $73.66 per barrel, while WTI futures rose 6 cents to $70.35. The day before, on Wednesday, both benchmark oil grades rose by more than $1.
On Wednesday, the Organization of the Petroleum Exporting Countries (OPEC) lowered its demand growth forecast for 2025 for the fifth consecutive time, this time by the most in the entire period of adjustments.
In the United States, the world’s largest oil consumer, gasoline and distillate stockpiles rose more than expected last week, according to the Energy Information Administration.
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Among the factors that contributed to the stabilization of prices were weak demand, especially in China, the largest oil importer, as well as increased oil supplies from non-OPEC countries. However, investors expect an increase in demand in China after Beijing announced plans to introduce a “moderately loose” monetary policy in 2025.
JPMorgan analysts said in a note that global oil demand grew slower than expected this month, but remained steady.
“Growth (in oil demand) slowed somewhat over the past week due to lower jet fuel consumption in most regions of the world,”
– they said in their analytical document.
China increased its oil imports in November for the first time in seven months, rising by more than 14% year-on-year.
Now, market attention is focused on possible decisions by the US Federal Reserve to cut the discount rate next week.
On Wednesday, oil prices rose after the EU agreed on the 15th package of sanctions against Russia over its aggression against Ukraine. The restrictions are aimed at the so-called “shadow fleet” of vessels that help Russia circumvent the $60 per barrel limit on Russian offshore oil set by the G7 in 2022, allowing it to continue exporting.
The Kremlin has said that the possible tightening of US sanctions against Russian oil indicates the desire of President Joe Biden ‘s administration to leave a difficult legacy for US-Russian relations.
US Treasury Secretary Janet Yellen said on Wednesday that Washington continues to look for creative ways to reduce Russia’s oil revenues. She added that the decline in global oil demand creates new opportunities for tougher sanctions.
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