Mumbai, 14 Dec (Commoditiescontrol): Crude oil prices rose sharply on Friday, gaining around 2% to reach a three-week high. The rally was fueled by concerns over tighter supplies due to potential new sanctions on Russia and Iran, as well as expectations of lower interest rates in the U.S. and Europe, which could bolster fuel demand.
Brent crude futures increased by $1.08, or 1.5%, to close at $74.49 per barrel, marking their highest finish since November 22. Similarly, U.S. West Texas Intermediate (WTI) crude climbed $1.27, or 1.8%, to settle at $71.29 per barrel, its highest close since November 7. For the week, Brent rose 5%, while WTI posted a 6% gain.
The market reacted positively to news that European Union ambassadors agreed on a 15th package of sanctions against Russia, targeting its shadow tanker fleet to restrict oil shipments amidst the ongoing conflict in Ukraine. Similarly, the U.S. is considering additional sanctions. Meanwhile, Britain, France, and Germany informed the United Nations Security Council of their readiness to reimpose full international sanctions on Iran if needed to prevent its nuclear weapons development.
Further support came from Chinese data showing a year-on-year increase in November crude imports—the first such rise in seven months. China's refiners have been ramping up purchases, particularly from Saudi Arabia, attracted by lower prices, while independent refiners are using up their import quotas before year-end. The International Energy Agency (IEA) revised its forecast for global oil demand growth in 2025 to 1.1 million barrels per day (bpd), up from the previous estimate of 990,000 bpd, citing China's economic stimulus efforts.
Despite the bullish trends, the IEA also predicted a potential oil surplus next year, with non-OPEC+ countries expected to boost supply by 1.5 million bpd, led by Argentina, Brazil, Canada, Guyana, and the U.S. Within OPEC+, the United Arab Emirates plans to reduce oil shipments early next year to enforce stricter production discipline, while sanctions on Iran have raised logistics costs, driving up the price of Iranian crude sold to China.
Investor sentiment was also influenced by expectations of a U.S. Federal Reserve interest rate cut next week, with further reductions likely in 2025. Lower rates typically support economic growth and, in turn, fuel demand. Meanwhile, data showed weaker-than-expected new bank lending in China and minimal U.S. import price growth in November, factors that could prompt additional stimulus measures globally.
As economic policies and geopolitical developments continue to unfold, crude oil prices remain sensitive to evolving supply and demand dynamics.
(By Commoditiescontrol Bureau: 09820130172)
0 Comments 
Post Comment 
