By Jeslyn Lerh
SINGAPORE (Reuters) -Oil prices fell on Friday on concerns about demand growth through 2025, especially in top oil importer China, putting global oil benchmarks on track to end the week down nearly 3% .
Brent crude futures (BZ=F) fell 33 cents, or 0.45%, to $72.55 a barrel by 0730 GMT. U.S. West Texas Intermediate crude futures fell 32 cents, or 0.46%, to $69.06 a barrel.
Chinese state refiner Sinopec said in its annual energy outlook released Thursday that China’s crude oil imports could peak as early as 2025 and the country’s oil consumption would peak in 2027 as demand for diesel and gasoline weakens .
“Benchmark crude oil prices are in a prolonged consolidation phase as the market heads towards year-end, pressured by uncertainty over oil demand growth,” said Emril Jamil, senior research specialist at LSEG.
He added that OPEC+ would need supply discipline to boost prices and calm market jitters due to ongoing revisions to demand growth prospects. The Organization of the Petroleum Exporting Countries and allies, together called OPEC+, recently lowered its growth forecast for global oil demand in 2024 for the fifth month in a row.
Meanwhile, the dollar’s climb to a two-year high also weighed on oil prices after the Federal Reserve signaled it would be cautious about cutting 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 reduce oil demand.
JPMorgan sees the oil market moving from equilibrium in 2024 to a surplus of 1.2 million barrels per day (bpd) in 2025, while the bank forecasts that non-OPEC+ supply will increase by 1.8 million barrels per day by 2025 will increase and that OPEC production will remain at current levels.
In a move that could tighten supply, G7 countries are considering ways to tighten the price ceiling on Russian oil, such as with an outright ban or by lowering the price threshold, Bloomberg reported Thursday.
Russia has sidestepped the $60 per barrel limit imposed in 2022 by using its “shadow fleet” of ships, which the EU and Britain have responded to with further sanctions in recent days.
(Reporting by Colleen Howe in Beijing and Jeslyn Lerh in Singapore; Editing by Sonali Paul and Muralikumar Anantharaman)