Pre-Market Oil Recap: Oil Hits Three-Week Highs
The recent interest rate cuts in the United States and Europe could boost global energy consumption, according to experts.
Last week, oil prices rose more than 1%, reaching three-week highs, as expectations of new sanctions on Russia and Iran heightened supply concerns. Meanwhile, lower interest rates in the U.S. and Europe are projected to drive higher demand for fuel.
Brent crude futures increased by $1.05, or 1.4%, to $74.46 per barrel, while U.S. West Texas Intermediate (WTI) crude gained $1.24, or 1.8%, closing at $71.26 per barrel. For the week, Brent recorded a 5% gain, reaching its highest close since November 22. USOIL saw a 6% weekly increase, hitting its highest level since November 7.
Oil Price Drivers
This strength is fueled by growing expectations of tighter sanctions on Russia and Iran, a more favorable economic outlook in China, political instability in the Middle East, and anticipation of a Federal Reserve rate cut in the U.S. this week.
The European Union ambassadors have agreed on a 15th package of sanctions against Russia in response to its war in Ukraine, targeting its “shadow fleet” of tankers. The U.S. is reportedly considering similar measures.
Additionally, the United Kingdom, France, and Germany informed the United Nations Security Council that they are prepared to reimpose all international sanctions on Iran if necessary, to prevent the country from acquiring nuclear weapons.
Meanwhile, recent data from China revealed that crude oil imports grew annually in November for the first time in seven months, driven by lower prices and stockpiling efforts.
The International Energy Agency (IEA) raised its forecast for global oil demand growth in 2025 to 1.1 million barrels per day, up from last month’s estimate of 990,000, citing China’s recent stimulus measures.
However, the Organization of the Petroleum Exporting Countries (OPEC) adjusted its demand growth outlook downward this week, reflecting cautious optimism in the market.
ABOUT THE AUTHOR
See More
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals