Key information
- Brent and WTI saw slight declines at the start of the week, after which oil prices briefly recovered.
- A recent stimulus package in China and expected increases in oil production from non-OPEC+ countries add to market uncertainty.
- The OPEC+ monthly report for November 2024 announced a reduction in the global oil demand forecast for 2024.
The possibility of increased U.S. oil production under Trump's presidency has led to fluctuations in global oil prices. WTI crude oil prices fell significantly earlier this week and Brent crude oil also saw a decline on Tuesday morning. Although both oil prices subsequently recovered slightly and recorded $68.22 per barrel (WTI crude) and $71.99 per barrel (Brent) at the time of publishing this article.
Factors influencing oil prices
This volatility is driven by heightened expectations for increased U.S. production, fueled by President-elect Trump's vocal support for increased drilling activity. Its policies aim to simplify the process of obtaining drilling leases, facilitate the development of energy infrastructure and potentially enable greater export of natural gas. Conversely, the Biden administration has implemented stricter regulations on drilling on federal lands, including higher bonding and royalty payment requirements, as well as a reduction in the number of land leases. federal lands sold.
Market uncertainty and global oil dynamics
China's recent recovery plan, amounting to 10,000 billion yuan (1.30 billion euros), adds to market uncertainty. Analysts fear these measures will not be enough to boost economic growth, which could lead to lower oil demand from China in the near future. Additionally, OPEC+ warned of an anticipated increase in non-OPEC+ oil production in 2025, forecasting a daily increase of 1.3 million barrels. This projection is echoed by the US Energy Information Administration (EIA), which forecasts a similar increase of 1.4 million barrels per day next year.
OPEC+ Monthly Report November 2024
The OPEC+ monthly report for November 2024 announced a reduction in global oil demand forecast for 2024. OPEC now expects an increase of 1.8 million barrels per day, a decrease of 107 000 barrels compared to the previous estimate. The slowdown in the Chinese economy and other Asian markets contributed to the lower forecast. Despite this downward revision, OPEC's outlook remains more optimistic than other market estimates, with oil prices hovering around $72 per barrel.
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