Oil little changed as demand weakness offsets sanctions-driven supply risks
Business
Brent crude futures were up 14 cents at $73.66 a barrel. US WTI crude rose 6 cents to $70.35
(Reuters) – Oil prices were little changed in Asian trade on Thursday as forecasts of weak demand and a higher-than-expected rise in US gasoline and distillate inventories stemmed gains from an additional round of EU sanctions threatening Russian oil flows.
Brent crude futures were up 14 cents at $73.66 a barrel at 0519 GMT. US West Texas Intermediate crude futures rose 6 cents to $70.35. Both benchmarks rose over $1 each on Wednesday.
OPEC cut its demand growth forecasts for 2025 for the fifth straight month on Wednesday and by the largest amount yet.
"Investors will be closely monitoring the IEA's market balance estimates for 2025, which will reflect OPEC's recent announcement," analysts at ANZ said in a note on Thursday.
In the world's top oil consumer, the United States, gasoline and distillate inventories rose by more than expected last week, according to data from the Energy Information Administration.
Weak demand, particularly in top importer China, and non-OPEC+ supply growth were two factors behind the move. However, investors anticipate a rise in Chinese demand, after Beijing unveiled plans this week to adopt an "appropriately loose" monetary policy in 2025, which could spur oil demand.
Global oil demand rose at a slower-than-expected rate this month, but has remained resilient, analysts at JPMorgan said in a note on Thursday.
"Growth (in oil demand) over the past week has been tempered by a slight reduction in jet fuel consumption across much of the world," the note read.
Chinese crude imports also grew annually for the first time in seven months in November, up more than 14% from a year earlier.
The market will now watch for cues on interest rate cuts by the US Federal Reserve next week.
Prices rose on Wednesday after European Union ambassadors agreed to a 15th package of sanctions on Russia over its war against Ukraine. They targeted the "shadow fleet" of ships that has aided Russia in bypassing the $60 per barrel price cap imposed by the G7 on Russian seaborne crude oil in 2022, and has helped keep Russian oil flowing.
The Kremlin said that reports of a possible tightening of US sanctions on Russian oil suggested the administration of President Joe Biden wants to leave a difficult legacy for US-Russia relations.
Treasury Secretary Janet Yellen said on Wednesday that the US is continuing to look for creative ways to reduce Russia's oil revenue, adding that lower global demand for oil created an opportunity for more sanctions.
