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Oil heads for weekly decline of about 3%
Oil prices fell on Friday amid concerns about demand growth in 2025, especially in China, the largest importer of crude, and the two global benchmarks are heading for a decline of about 3%.
Brent crude futures fell 61 cents, or 0.84%, to $72.27 a barrel. U.S. West Texas Intermediate crude futures fell 64 cents, or 0.92%, to $68.74 a barrel.
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The dollar's rise to a two-year high also weighed on oil prices, after the U.S. Federal Reserve indicated it would be cautious about cutting interest rates next year.
A stronger dollar makes oil more expensive for holders of other currencies, and slowing the pace of interest rate cuts could weaken economic growth and reduce demand for crude.
JP Morgan expects the oil market to move from balance in 2024 to a surplus of 1.2 million barrels per day in 2025, and the bank expects supplies from outside the OPEC+ alliance to increase by 1.8 million barrels per day in 2025, while OPEC production remains at current levels.
Meanwhile, the amount of Iranian oil stored on tankers at sea rose to the highest level since late July, as crude flows from the OPEC member to China were disrupted by sweeping US sanctions.
For its part, Chinese state-owned refiner Sinopec said in its annual energy outlook, issued on Thursday, that China's imports could peak in 2025, and that the country's oil consumption will peak by 2027, with weak demand for diesel and gasoline.
"Benchmark crude prices are in a long stabilization phase amid uncertainty about demand growth towards the end of the year," said Emril Jamil, a researcher at the London Stock Exchange Group, according to Reuters.
