Commodities
Oil set for annual loss although buoyed on the day by China data
By Robert Harvey
LONDON (Reuters) -Oil prices were on track to end 2024 with a second consecutive year of losses, although they rose on the day on Tuesday after data showed China’s manufacturing activity expanded in December.
futures rose by 54 cents, or 0.73%, to $74.53 a barrel as of 1107 GMT. U.S. West Texas Intermediate crude gained 57 cents, or 0.8%, to $71.56 a barrel.
At those levels, Brent was down around 3.3% from its final 2023 close price of $77.04, while WTI was little changed from where it settled on Dec. 29 last year at $71.65.
In September, Brent futures closed below $70 a barrel for the first time since December 2021, while their highest closing price of 2024 at $91.17 was also the lowest since 2021, as the impacts of a post-pandemic rebound in demand and price shocks from Russia’s 2022 invasion of Ukraine began to fade.
A weaker demand outlook in China in particular forced both the Organisation of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) to cut their oil demand growth expectations for 2024 and 2025.
With non-OPEC supply also set to rise, the IEA sees the oil market going into 2025 in a state of surplus, even after OPEC and its allies delayed their plan to start raising output until April 2025 against a backdrop of falling prices.
Investors will be also be watching the Federal Reserve’s rate cut outlook for 2025 after central bank policymakers earlier this month projected a slower path due to stubbornly high inflation.
Lower interest rates generally incentivise borrowing and fuel growth, which in turn is expected to boost oil demand.
Markets are also gearing up for U.S. President-elect Donald Trump’s policies around looser regulation, tax cuts, tariff hikes and tighter immigration that are expected to be both pro-growth and inflationary.
Investors will also be mulling the potential impacts on oil prices of Trump’s calls for an immediate ceasefire in the Russia-Ukraine war, as well as the possible re-imposition of the so-called “maximum pressure” policy towards Iran.
Oil prices ticked higher on Tuesday as China’s manufacturing activity expanded for a third straight month in December but at a slower pace, an official factory survey showed on Tuesday, suggesting a blitz of fresh stimulus is helping to support the world’s second-largest economy.
China also issued at least 152.49 million metric tons of import quotas in a second batch for 2025, several sources said on Monday, taking next year’s total to 158.33 million tons, down from 182.69 million tons in 2024.
Commodities
Oil prices rise; set for second straight weekly gain
Investing.com–Oil prices rose on Friday, heading for a second consecutive weekly gain as optimism around China’s economic growth lifted market sentiment.
The were last up 0.8% to $76.6 a barrel, and expiring in February was up 1.1% to $73.3 a barrel.
Oil had gained sharply in the previous session after data showed growth in Chinese factory activity.
Both contracts were on course for second consecutive weekly gains, with WTI 1.3% and 0.9% higher.
Chinese stimulus hopes support oil prices
China’s grew in December, a Caixin/S&P Global survey showed on Thursday, but at a slower pace than expected.
An official survey released on Tuesday also showed that China’s manufacturing activity barely grew in December. However, services and construction fared better, with the data suggesting that policy stimulus is trickling into some sectors.
Beijing has signaled looser monetary policy for 2025 and has doled out a raft of major stimulus measures since late September, in order to boost its sluggish economy.
China’s central bank has indicated that it plans to lower interest rates from the current 1.5% “at an appropriate time” in 2025, the Financial Times reported on Friday.
Traders assess EIA data amid oversupply concerns
{{8849|US crude oil inventories declined, while gasoline and distillate stocks saw significant increases as demand softened during the week ending December 27, the reported on Thursday.
The EIA stated that dropped by 1.2 million barrels last week, falling short of analysts’ expectations for a 2.8 million-barrel decrease.
Latest EIA surveys have shown that U.S. oil production remains near record levels, and the incoming Donald Trump administration is likely to agree to policies that would focus on ramping up domestic fossil fuel production.
This comes amid worries about potential oversupply driven by anticipated production increases from non-OPEC nations, further underscoring an oversupply scenario.
The International Energy Agency recently said that the oil market will remain adequately supplied, despite a rise in demand forecast for 2025.
(Peter Nurse contributed to this article.)
Commodities
Biden to ban new oil drilling over vast areas of US Atlantic, Pacific waters, Bloomberg News reports
(Reuters) – President Joe Biden is set to ban new offshore oil and gas development across 625 million acres (250 million hectares) of U.S. coastal territory, Bloomberg News reported on Friday.
The ban, to be announced on Monday, rules out the sale of drilling rights in stretches of the Atlantic and Pacific oceans and the eastern Gulf of Mexico, said the report, citing unidentified people familiar with the matter.
Biden is leaving the possibility open for new oil and leasing in the central and western areas of the Gulf of Mexico, which account for around 14% of the nation’s production of these fuels, the report said.
The White House did not immediately respond to a Reuters request for comment outside of business hours.
The ban would solidify Biden’s legacy on addressing climate change and his goal to decarbonize the U.S. economy by 2050.
The New York Times (NYSE:) reported that a section of the law Biden’s decision relies on, the Outer Continental Shelf Lands Act, gives a president wide leeway to bar drilling and does not include language that would allow President-elect Donald Trump or other future presidents to revoke the ban.
Biden, Trump and Trump’s predecessor, Barack Obama, all used the law to ban sales of offshore drilling rights in some coastal areas.
Trump tried in 2017 to reverse Arctic and Atlantic Ocean withdrawals Obama had made at the end of his presidency, but a federal judge ruled in 2019 that the law does not give presidents the legal authority to overturn prior bans.
Commodities
Russia clears thousands of tons of contaminated sand after Black Sea oil spill
(Reuters) – Russian rescue workers have cleared more than 86,000 metric tons of contaminated sand and earth on either side of the Kerch Strait following an oil spill in the Black Sea last month, the emergencies ministry said on Saturday.
The oil leaked from two ageing tankers that were hit by a storm on Dec. 15. One sank and the other ran aground.
More than 10,000 people have been working to shovel up viscous, foul-smelling fuel oil from sandy beaches in and around Anapa, a popular summer resort. Environmental groups have reported deaths of dolphins, porpoises and sea birds.
The emergencies ministry said on the Telegram messaging app that oil-tainted soil had been collected in the broader Kuban region in Russia and in Crimea, which Moscow annexed from Kyiv in 2014.
The ministry published video footage showing dozens of workers in protective suits loading bags of dirt onto diggers and others skimming dirt off the sand with shovels.
Russia’s transport ministry said this week experts had established that about 2,400 metric tons of oil products had spilled into the sea, a smaller spill than initially feared.
When the disaster struck, state media reported that the stricken tankers, both more than 50-years old, were carrying some 9,200 metric tons (62,000 barrels) of oil products in total.
The spill involved heavy M100-grade fuel oil that solidifies at a temperature of 25 degrees Celsius (77 degrees Fahrenheit) and, unlike other oil products, does not float to the surface but sinks to the bottom or remains suspended in the water column.
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