Published by Jessica Weisman-Pitts
Posted on December 23, 2024
2 min readLast updated: January 27, 2026
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By Robert Harvey
LONDON (Reuters) -Oil prices stabilised on Monday after losses last week as lower-than-expected U.S. inflation data offset investors’ concerns about a supply surplus next year.
Brent crude futures were down by 38 cents, or 0.52%, to $72.56 a barrel by 1300 GMT. U.S. West Texas Intermediate crude futures were down 34 cents, or 0.49%, to $69.12 per barrel.
Oil prices rose in early trading after data on Friday that showed cooling U.S. inflation helped alleviate investors’ concerns after the Federal Reserve interest rate cut last week, IG markets analyst Tony Sycamore said.
“I think the U.S. Senate passing legislation to end the brief shutdown over the weekend has helped,” he added.
But gains were reversed by a stronger U.S. dollar, UBS analyst Giovanni Staunovo told Reuters.
“With the U.S. dollar changing from weaker to stronger, oil prices have given up earlier gains,” he said.
The dollar was hovering around two-year highs on Monday morning, after hitting that milestone on Friday.
Brent futures fell by around 2.1% last week, while WTI futures lost 2.6%, on concerns about global economic growth and oil demand after the U.S. central bank signalled caution over further easing of monetary policy. Research from Asia’s top refiner Sinopec pointing to China’s oil consumption peaking in 2027 also weighed on prices.
Macquarie analysts projected a growing supply surplus for next year, which will hold Brent prices to an average of $70.50 a barrel, down from this year’s average of $79.64, they said in a December report.
Concerns about European supply eased on reports the Druzhba pipeline, which sends Russian and Kazakh oil to Hungary, Slovakia, the Czech Republic and Germany, has restarted after halting on Thursday due to technical problems at a Russian pumping station.
U.S. President-elect Donald Trump on Friday urged the European Union to increase U.S. oil and gas imports or face tariffs on the bloc’s exports.
Trump also threatened to reassert U.S. control over the Panama Canal on Sunday, accusing Panama of charging excessive rates to use the Central American passage and drawing a sharp rebuke from Panamanian President Jose Raul Mulino.
(Reporting by Robert Harvey in London, Florence Tan and Siyi Liu in Singapore; editing by Jason Neely)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI) or Producer Price Index (PPI).
Brent crude futures are contracts to buy or sell Brent crude oil at a predetermined price on a specified date. They are a key benchmark for global oil prices.
A supply surplus occurs when the quantity of a product supplied exceeds the quantity demanded at a given price, often leading to lower prices in the market.
A stronger U.S. dollar means that the currency has increased in value compared to other currencies, making imports cheaper and exports more expensive for foreign buyers.
Monetary policy refers to the actions taken by a central bank to manage the money supply and interest rates to achieve macroeconomic objectives such as controlling inflation and stabilizing currency.
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