By Jeslyn Lerh
SINGAPORE (Reuters) – Oil prices fell on Friday on concerns about demand growth in 2025, particularly in top crude importer China, putting global oil benchmarks on track to end the week down nearly 3%.
Brent crude futures (BZ=F) fell 33 cents, or 0.45%, to $72.55 a barrel by 0730 GMT. US West Texas Intermediate crude futures fell 32 cents, or 0.46%, to $69.06 a barrel.
Chinese state refiner Sinopec said in its annual energy outlook released on Thursday that China's crude imports could peak as soon as 2025 and the country's oil consumption would peak by 2027 as demand for diesel and gasoline weakens.
“Benchmark crude prices are in a long consolidation phase as the market moves towards the end of the year weighed down by uncertainty in oil demand growth,” said Emril Jamil, senior research specialist at LSEG.
He added that OPEC+ would need supply discipline to boost prices and ease jittery market nerves over continued revisions to its demand growth forecast. The Organization of the Petroleum Exporting Countries and allies, collectively known as OPEC+, recently cut its growth forecast for global oil demand in 2024 for the fifth consecutive month.
Meanwhile, the dollar's climb to a two-year high also weighed on oil prices, after the Federal Reserve signaled it would be cautious about cutting interest rates in 2025.
A stronger dollar makes oil more expensive for holders of other currencies, while a slower pace of rate cuts could reduce economic growth and cut demand for oil.
JPMorgan sees the oil market moving from balance in 2024 to a surplus of 1.2 million barrels per day (bpd) in 2025, as the bank forecasts non-OPEC+ supply to increase by 1.8 million bpd in 2025 and output OPEC remains at current levels.
In a move that could reduce supply, G7 countries are considering ways to tighten the price cap on Russian oil, such as with an outright ban or by lowering the price threshold, Bloomberg reported Thursday.
Russia has avoided the $60 per barrel cap set in 2022 using its “shadow fleet” of ships, which the EU and Britain have targeted with further sanctions in recent days.
(Reporting by Colleen Howe in Beijing and Jeslyn Lerh in Singapore; Editing by Sonali Paul and Muralikumar Anantharaman)