Oil Prices See First Weekly Rise Since November
Oil prices stabilized on Friday, marking the first weekly rise in over a month. Brent crude reached $73.48 per barrel, while U.S. West Texas Intermediate (WTI) climbed to $70.11. Both benchmarks are poised for over 3% weekly gains, fueled by supply concerns from increased sanctions on Iran and Russia and optimism about rising demand in China.
Sanctions Fuel Supply Concerns
Additional sanctions on Iran and Russia have stoked fears of supply disruptions, supporting oil prices. The tighter restrictions coincide with broader market anxiety about geopolitical instability, which could impact oil availability in 2025.
China’s Stimulus Drives Demand Optimism
China, the world’s second-largest oil consumer, has seen an uptick in crude imports for the first time in seven months. November’s import growth reflects stockpiling and the attraction of lower prices. These trends are expected to persist into early 2025, with refiners leveraging discounts from major suppliers like Saudi Arabia.
Global Demand Outlook Brightens
The International Energy Agency (IEA) has revised its global oil demand growth forecast for 2025 to 1.1 million barrels per day (bpd), up from last month’s 990,000 bpd prediction. This optimistic revision aligns with China’s economic stimulus measures, which are likely to bolster energy consumption.
Surplus Supply Could Cap Prices
Despite demand optimism, the IEA forecasts a supply surplus in 2025. Non-OPEC+ nations, including Canada, Brazil, Argentina, and the United States, are set to increase output by 1.5 million bpd. Canadian producers and U.S. shale operators are expected to contribute significantly, though growth may slow if Brent prices fall below $70 per barrel.
Technical Factors and Investor Sentiment
Technical resistance at $71 per barrel has played a role in stabilizing prices, although stronger recovery momentum remains elusive. Meanwhile, investors anticipate the U.S. Federal Reserve will cut interest rates next week, potentially easing economic pressures and supporting oil markets.
Looking Ahead to 2025
Oil markets face a complex balance of rising demand, robust supply growth, and geopolitical risks. While short-term price recovery is evident, long-term stability will depend on factors like production levels, Chinese economic policies, and global economic trends.