WATCH THE VIDEO HERE The oil market appreciated on Tuesday, December 31, 2024, though it posted an annual decline of 3 per cent, the second straight year it closed in the negative region amid a slowdown in the Chinese economy as the United States and other oil producers not in the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) pumped more crude into a well-supplied global market. Yesterday, Brent crude futures went up by 65 cents or 0.88 per cent to $74.64 a barrel and the US West Texas Intermediate (WTI) crude futures gained 73 cents or 1.03 per cent to trade at $71.72 a barrel. A weaker demand outlook in China forced both OPEC and the International Energy Agency (IEA) to cut their oil demand growth expectations for 2024 and 2025. The IEA sees the oil market entering 2025 in surplus, even after OPEC and its allies delayed their plan to start raising output until April 2025 against a backdrop of falling prices. China, which is the world’s largest oil importer, faced a lot of headwinds which impacted oil as it also saw increased adoption of Electronic Vehicles (EVs). OPEC+, which pumps about half the world’s oil, at its December meeting pushed back the start of oil output rises by three months until April 2025 and extended the full unwinding of cuts by a year until the end of 2026. Rising production from non-OPEC countries like the US and Brazil is expected to keep the market well-supplied. The market is also bracing for substantial policy shifts, encompassing tariffs, deregulation, and tax amendments as Donald Trump is set to return to the White House in January 2025. So far, the former US president has called for an immediate ceasefire in the Russia-Ukraine war and could re-impose a so-called maximum pressure policy toward Iran, which could have major implications for oil markets. He has also threatened to place higher tariffs on China, a move that could have a ripple effect on oil demand. On the Middle East front, the US military said it carried out strikes against Houthi targets in Sanaa and coastal locations in Yemen on Monday and Tuesday. The Iran-backed militant group has been attacking commercial shipping in the Red Sea for more than a year in solidarity with Palestinians amid Israel’s year-long war in Gaza, threatening global oil flows.
Oil Market Closes Last Trading Session of 2024 Bullish
