Oil prices have declined, with Brent crude futures dropping 41 cents to $72.47 per barrel, and U.S. West Texas Intermediate crude futures falling 39 cents to $68.99 per barrel.
China’s oil demand is projected to peak by 2027, with fuel consumption slowing.
The U.S. dollar has reached its highest value since November 22, making commodities more expensive for holders of other currencies.
OPEC+ has reduced its 2024 global oil demand growth forecast for the fifth consecutive month.
J.P. Morgan anticipates a market surplus of 1.2 million barrels per day in 2025.
G7 countries are considering stricter measures on Russian oil price caps to tighten supply controls.
Analysts suggest that oil prices may fall below $50 per barrel in 2025 if a “perfect storm” of negative factors hits the market, including sharp economic declines in China and Europe, and increased U.S. oil production.
The U.S. is increasingly dependent on Canadian crude oil, which now accounts for over 50% of its oil imports, up from 33% in 2013.
President-elect Donald Trump’s threats to impose tariffs of up to 25% on imports from Canada and Mexico may strain this relationship, potentially raising U.S. energy costs and contributing to inflation.
Despite being the world’s largest oil producer, the U.S. still imports significant amounts of oil, especially heavier crude from Canada, due to its refining infrastructure.
Canadian officials are considering their responses, with some suggesting potential trade retaliation, though Alberta’s leader prefers finding a solution.
Stable oil prices and decreased energy costs have recently eased inflation, but new energy tariffs could reverse this trend, increasing gasoline prices and broadening inflation.
Energy stocks have been declining, with the Energy Select Sector SPDR fund falling 3.5% in the past two days, approaching a three-month low.
Exxon Mobil has declined for eight consecutive days, reflecting a general negative sentiment.
The decline in oil prices has been influenced by the possible truce between Israel and Hamas, and a shift in investor focus towards large technology companies.
China’s oil demand fell 2.1% in November compared to the previous year, and is expected to grow less in the coming years due to economic slowdown and increased sales of electric and hybrid vehicles.
The demand for gasoline and diesel has peaked in China, and although it could increase if the government stimulates the economy, the reduction in gasoline usage is a warning sign for investors looking towards 2025.
