Jan 31, 2025 (MarketLine via COMTEX) --
Crude oil prices declined overall during the week amid worries over economic outlook in key markets around the world. China witnessed a contraction in its manufacturing sector while there remained an uncertainty over the growth outlook in North America once the US implements 25% import tariffs on Canada and Mexico. Besides, the US Federal Reserve kept the countryaEUR(TM)s interest rates unchanged during its fiscal review, which put additional pressure on oil prices during the week.
Some key factors that led to changes in crude oil prices this week are as follows:
Oil prices fell on Monday, weighed down by worries over slowing factory activity in China and its likely repercussions on the country’s energy consumption. China’s National Bureau of Statistics revealed that the manufacturing purchasing managers’ index (PMI) stood at 49.1 in January 2025, i.e. below the growth benchmark of 50, thus signaling a contraction in the country’s industrial output. Prices were also pressured by a crash in major US equity indices following the release of a new, low-cost artificial intelligence model from DeepSeek, a Chinese start-up. Besides, Chevron completed the expansion of its Tengiz oilfield in Kazakhstan that would see its output rising by around 260,000 barrels per day (bpd) at full capacity. This news of more supply getting added to global oil markets weighed the prices further down.Oil prices rose on Tuesday, supported by a brief disruption to crude oil exports from Libya after locals halted operations at Es Sider and Ras Lanuf ports. However, the country’s oil producer, National Oil Corp, held successful negotiations to resolve the dispute during the day, thereby ensuring continuity in exports. The upside to prices was somewhat restrained by looming worries over the prospect of US imposing tariffs on Canada and Mexico from February 1, 2025. Any such decision might have a bearing on economic growth in these markets, and hence oil demand. Oil prices declined again on Wednesday, weighed down by worries over the prevailing high interest rates in the US and its impact on borrowing costs for business and consumers. This was after the US Federal Reserve retained the benchmark interest rates and gave no clarity on any cuts in the future. Prices also came under pressure from a weekly build in the US crude stockpiles. As per the US Energy Information Administration (EIA) data, crude inventory in the country rose by 3.46 million barrels for the week ending on January 24, 2025. Oil prices rose slightly on Thursday, supported by prospects of reduced crude oil exports from Russia due to tightening of Western sanctions on its oil entities. The sanctions, which were primarily aimed at the country’s shadow fleet of tankers, are anticipated to cause a monthly decline in crude loadings from ports in Western Russia by around 8% during February 2025.Oil prices dipped marginally on Friday, weighed down by worries over the likely impact of the upcoming US tariffs on its trade with Canada and Mexico. President Trump reiterated the two countries to halt the supply of fentanyl into the US to allow room for discussions over the tariffs. Canada indicated that it would impose tariffs of its own, potentially leading to a trade war among the North American neighbors. It was unclear if crude oil would be part of the US sanctions that would be effective from March 1, 2025, but its inclusion might disrupt supplies to refiners particularly in the US Midwest.
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COMTEX_462728592/2227/2025-02-12T18:08:46
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