Commodities
Low crude oil inventories may support higher 2025 prices
Investing.com — Low crude oil inventories are setting the stage for potential price increases in 2025, according to a recent note from Wells Fargo (NYSE:).
Despite a flat performance this year, the bank said prices could rebound as global supply remains tight and economic conditions improve.
Wells Fargo points out that while crude oil prices have seen minimal change in 2024—just 2% lower since the year began—this has largely been due to “a host of uncertainties on global demand growth and weak economic conditions” that have kept prices under pressure.
However, tight supply conditions mean that crude oil inventories are staying low, which, historically, has supported price increases.
The bank explains, “When global inventories are low or moving lower, oil prices have tended to move higher.” Wells Fargo highlights that this trend of declining inventories is evident in recent months, suggesting that oil prices could soon rise in response.
Looking forward, Wells Fargo projects that an improved macroeconomic environment and increased demand growth in regions such as China could further bolster oil prices.
“Efforts by China to stabilize its property sector could lead to better overall demand growth for commodities and oil,” the note says. As demand picks up globally, Wells Fargo expects crude oil prices to respond accordingly.
For 2025, the bank forecasts West Texas Intermediate (WTI) crude to reach $85–$95 per barrel and to range from $90 to $100 per barrel.
With these expectations, Wells Fargo remains favorable on the Energy sector within commodities, anticipating that low inventories combined with global economic recovery will underpin a positive outlook for crude oil prices in the coming year.
SHANGHAI (Reuters) – China will reduce import tariffs on ethane and certain recycled and aluminium raw materials from next year, the government said on Saturday.
The Ministry of Finance announced adjustments to various import tariff categories, effective Jan. 1, aimed at increasing imports of high-quality products, expanding domestic demand and promoting high-level opening-up, it said in a statement.
Provisional import tariffs below the most-favoured-nation rates will be applied to 935 items, the ministry said. Import tariffs will be reduced on ethane and certain recycled copper and aluminium raw materials to advance green and low-carbon development.
Tariffs will rise on commodities including molasses and sugar-containing pre-mixed powders will increase but be reduced on items such as cyclic olefin polymers, ethylene-vinyl alcohol copolymers and automatic transmissions for special-purpose vehicles such as fire trucks and repair vehicles.
Import tariffs will also be reduced on items such as sodium zirconium cyclosilicate, viral vectors for CAR-T tumour therapy, and nickel-titanium alloy wires for surgical implants.
The China-Maldives Free Trade Agreement will come into effect on Jan. 1, with tariff reduction implementations, the ministry said.
By Paul Carsten
LONDON (Reuters) – Oil prices edged up on Monday in thin holiday trade at the end of the year, as traders awaited more Chinese and U.S. economic data later this week to assess growth in the world’s two largest oil consumers.
futures rose 20 cents to $74.37 a barrel by 1208 GMT. The more active March contract was at $74.00 a barrel, up 21 cents.
U.S. West Texas Intermediate crude gained 27 cents to $70.87 a barrel.
Investors are eyeing China’s PMI factory surveys due on Tuesday and the U.S. ISM survey for December to be released on Friday.
Both Brent and WTI rose about 1.4% last week buoyed by a larger-than-expected drawdown from inventories in the week ended Dec. 20 as refiners ramped up activity and the holiday season boosted fuel demand. [EIA/S]
Available capacity at U.S. oil refiners is expected to decrease by 108,000 bpd in the week ending Jan. 3, research company IIR Energy said on Monday.
Oil prices were also supported by optimism for Chinese economic growth next year that could lift demand from the top crude oil importing nation.
To revive growth, Chinese authorities have agreed to issue a record 3 trillion yuan ($411 billion) in special treasury bonds in 2025, Reuters reported last week.
“Global oil consumption reached an all-time high in 2024 despite China underperforming expectations, and oil stockpiles are heading into next year at relatively low levels,” said Ryan Fitzmaurice, senior commodity strategist at Marex.
“Going forward, China economic data is expected to improve as the recent stimulus measures take hold in 2025. Also, lower rates in the U.S. and elsewhere should be supportive of oil consumption.”
Separately, the World Bank has raised its forecast for China’s economic growth in 2024 and 2025, but warned that subdued household and business confidence, along with headwinds in the property sector, would remain a drag next year.
SHANGHAI (Reuters) – China will reduce import tariffs on ethane and certain recycled and aluminium raw materials from next year, the government said on Saturday.
The Ministry of Finance announced adjustments to various import tariff categories, effective Jan. 1, aimed at increasing imports of high-quality products, expanding domestic demand and promoting high-level opening-up, it said in a statement.
Provisional import tariffs below the most-favoured-nation rates will be applied to 935 items, the ministry said. Import tariffs will be reduced on ethane and certain recycled copper and aluminium raw materials to advance green and low-carbon development.
Tariffs will rise on commodities including molasses and sugar-containing pre-mixed powders will increase but be reduced on items such as cyclic olefin polymers, ethylene-vinyl alcohol copolymers and automatic transmissions for special-purpose vehicles such as fire trucks and repair vehicles.
Import tariffs will also be reduced on items such as sodium zirconium cyclosilicate, viral vectors for CAR-T tumour therapy, and nickel-titanium alloy wires for surgical implants.
The China-Maldives Free Trade Agreement will come into effect on Jan. 1, with tariff reduction implementations, the ministry said.
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