Oil prices edged higher on Wednesday as tightening supplies from Russia and OPEC members coincided with positive economic data from the United States, signaling potential growth in oil demand.
- Brent Crude: Up 32 cents (0.42%) to $77.37 per barrel at 0135 GMT.
- West Texas Intermediate (WTI) Crude: Rose 42 cents (0.57%) to $74.67 per barrel.
Supply Dynamics
- OPEC Output: Oil production from OPEC members declined in December after two months of growth. According to a Reuters survey, field maintenance in the UAE offset production gains in Nigeria and other member nations.
- Russian Output: Russia’s December oil production averaged 8.971 million barrels per day, falling below its target, as reported by Bloomberg.
Economic Indicators
In the United States, the Job Openings and Labor Turnover Survey (JOLTS) revealed a rise in job openings in November, paired with low layoffs and fewer worker resignations. Analysts view this as evidence of a labor market returning to pre-pandemic norms, which could bolster economic activity and fuel demand.
Capital Economics commented, “The November JOLTS data, when paired with recent employment reports, shows a labor market returning to pre-pandemic norms.”
Inventory Trends
Market sources, citing American Petroleum Institute data, reported a decline in U.S. crude oil stocks last week, while fuel inventories increased.
Forecast for 2025
Analysts predict a bearish outlook for oil prices in 2025 due to anticipated oversupply:
- Non-OPEC Production Growth: Increased output from non-OPEC countries is expected to surpass demand growth by 485,000 barrels per day this year.
- Price Forecasts: BMI, a division of Fitch Group, projects Brent crude to average $76 per barrel in 2025, down from $80 in 2024.
This oversupply forecast aligns with market fundamentals and could exert downward pressure on oil prices despite near-term gains driven by tighter supplies and economic optimism.
