Oil prices were little changed in early Asian trade on Thursday as forecasts of weak demand and a higher-than-expected rise in U.S. gasoline and distillate inventories stemmed gains from an additional round of European Union sanctions that threatened Russian oil flows.
Brent crude futures were down 5 cents at $73.47 a barrel at 0141 GMT. U.S. West Texas Intermediate crude futures fell 11 cents to $70.18. Both benchmarks rose over $1 each on Wednesday.
OPEC cut its demand growth forecasts for 2025 for the fifth straight month on Wednesday and by the largest amount yet.
“Investors will be closely monitoring the IEA’s market balance estimates for 2025, which will reflect OPEC’s recent announcement,” analysts at ANZ said in a note on Thursday.
In the world’s top oil consumer United States, gasoline and distillate inventories rose by more than expected last week, according to data from the Energy Information Administration.
Weak demand, particularly in top importer China, and non-OPEC+ supply growth were two factors behind the move. However, investors anticipate a rise in Chinese demand, after Beijing unveiled plans this week to adopt an “appropriately loose” monetary policy in 2025, which could spur oil demand. Chinese crude imports also grew annually for the first time in seven months in November, up more than 14% from a year earlier. The market will now watch for cues on interest rate cuts by the U.S. Federal Reserve next week.
Prices rose on Wednesday after European Union ambassadors agreed to a 15th package of sanctions on Russia over its war against Ukraine.
The Kremlin said that reports of a possible tightening of U.S. sanctions on Russian oil suggested the administration of President Joe Biden wants to leave a difficult legacy for U.S.-Russia relations.
Treasury Secretary Janet Yellen said on Wednesday that the U.S. is continuing to look for creative ways to reduce Russia’s oil revenue, adding that lower global demand for oil created an opportunity for more sanctions.