12 Dec 2024

WTI has increased to $69.95 during the early European session on Thursday.

The rise in WTI prices is attributed to the potential tightening of US sanctions on Russian oil, along with additional stimulus measures from China.

Furthermore, OPEC has revised its demand growth forecast for 2024-2025 downward for the fifth consecutive month.

West Texas Intermediate (WTI), the benchmark for US crude oil, is currently trading at approximately $69.95 on Thursday. The slight increase in WTI prices is attributed to concerns regarding weak global demand growth and the potential for stricter sanctions on Russia and Iran.

On Wednesday, the Biden administration was reported to be contemplating more stringent sanctions on Russia's oil trade to intensify pressure on the Kremlin, particularly as Donald Trump is set to return to the White House in the coming weeks, according to Bloomberg. Concurrently, the European Union announced a new set of sanctions against Russia due to its ongoing conflict in Ukraine. These developments may lead to tighter global crude supplies, thereby potentially elevating WTI prices.

Additionally, rising expectations for further stimulus measures from China are influencing WTI prices. Chinese officials indicated on Monday that they would implement an "appropriately loose" monetary policy in 2025, marking the first easing of their stance in 14 years as Beijing seeks to invigorate its economy. "This has generated optimism in the oil market, with traders anticipating that these measures could result in increased oil consumption," stated Li Xing Gan, a financial markets strategist consultant for Exness.

A recent decline in US crude inventories may also support the price of black gold. The weekly report from the US Energy Information Administration (EIA) indicated that crude oil stockpiles in the United States fell by 1.425 million barrels for the week ending December 6, following a decrease of 5.073 million barrels the previous week. Market analysts had predicted a reduction of 1.1 million barrels.

Conversely, OPEC has revised its demand growth forecasts for 2024 and 2025 downward for the fifth consecutive month as of Wednesday. "OPEC is coming to terms with the realities they face; the cuts in demand growth forecasts underscore the challenges they encounter in attempting to balance the market as they approach 2025," remarked John Kilduff, a partner at Again Capital in New York.