Oil drops 1% on sluggish Chinese economic recovery, stronger US dollar; Brent at $77/bbl
₹5,978 per bbl, having swung between ₹5,868 and ₹6,017 per bbl during the session, against a previous close of ₹6,003 per barrel. Also Read: OPEC Expects Global Oil Demand to Slow in 2025 -Tensions remained high after the US mounted fresh strikes against Iran-aligned Houthi militants in Yemen on Tuesday after a Houthi missile hit a Greek vessel. Analysts say that oil prices may find a ceiling unless production is shut in.
-China's economy in the fourth quarter expanded by 5.2 per cent annually, calling into question forecasts that Chinese demand will fuel 2024 global oil growth. Still, China's oil refinery throughput in 2023 rose 9.3 per cent to a record high, indicating elevated demand. -''The economic data does not end the headwinds over crude oil demand, the Chinese outlook for 2024 and 2025 is still bleak," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
In the absence of actual impact on oil output, prices will remain well within the current $72-$82 range, said analysts. -The Organisation of Petroleum Exporting Countries (OPEC) stuck to its forecast for relatively strong growth in global oil demand in 2024. OPEC said on Wednesday that 2025 will bring a "robust" increase in oil use, led by China and the Middle East.
-Meanwhile, the US dollar hovered near a one-month high after comments from Federal Reserve officials lowered expectations for aggressive interest rate cuts. A stronger dollar reduces demand for dollar-denominated oil from buyers using other currencies. "Higher rates can lead to a weaker outlook for oil demand as economic activity tends to cool in a high interest rate environment, leaving oil prices vulnerable, according to analysts.
Read more on livemint.com
