Finance
Oil Prices Fall on Demand Concerns, Strong Dollar
Published by Global Banking & Finance Review®
Posted on December 20, 2024
2 min readLast updated: January 27, 2026
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Global Banking & Finance Review®
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Published by Global Banking & Finance Review®
Posted on December 20, 2024
2 min readLast updated: January 27, 2026
Add as preferred source on GoogleOil prices dropped due to demand concerns and a strong dollar, with potential peaks in China's imports by 2025 and a forecasted oil surplus in 2025.
By Colleen Howe
BEIJING (Reuters) - Oil prices fell in early trading on Friday on worries about demand growth in 2025, especially in top crude importer China, putting global oil benchmarks on track to end the week down more than 2%.
Brent crude futures fell by 31 cents, or 0.43%, to $72.57 a barrel by 0139 GMT. U.S. West Texas Intermediate crude futures fell 26 cents, or 0.26%, to $69.12 per barrel.
Chinese state-owned refiner Sinopec said in its annual energy outlook, released on Thursday, that China's imports could peak as soon as 2025 and the country's oil consumption would peak by 2027 as diesel and gasoline demand weaken.
The dollar's climb to a two-year high also weighed on oil prices, after the Federal Reserve flagged 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 dampen economic growth and trim oil demand.
J.P. Morgan 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+ growth increasing by 1.8 million bpd in 2025 and OPEC output remaining at current levels.
In a move that could pare 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 on Thursday. Russia has evaded the $60 per barrel cap imposed 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; Editing by Sonali Paul)
The article discusses the decline in oil prices due to demand concerns and the impact of a strong dollar.
A stronger dollar makes oil more expensive for holders of other currencies, reducing demand.
China's oil imports may peak by 2025, and a surplus is expected in 2025 due to increased non-OPEC+ production.
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