LONDON/NEW YORK: Oil prices were little changed on Wednesday, but headed for a fall of more than 15 percent in 2025, as expectations of oversupply increased in a year marked by wars, higher tariffs, increased OPEC+ output and sanctions on Russia, Iran and Venezuela.
Brent crude futures were down over 17 percent - the most substantial annual percentage decline since 2020 - and were on track for a third straight year of losses, their longest-ever losing streak. US West Texas Intermediate crude was headed for a near 19 percent annual decline.
BNP Paribas commodities analyst Jason Ying anticipates Brent will dip to USD55 a barrel in the first quarter before recovering to USD60 a barrel for the rest of 2026 as supply growth normalises and demand stays flat.
“The reason why we’re more bearish than the market in the near term is that we think that US shale producers were able to hedge at high levels,” he said.
“So the supply from shale producers will be more consistent and insensitive to price movements.”
After rising slightly earlier in the day, Brent futures were down 6 cents at USD61.23 a barrel by 1555 GMT, while US WTI crude was at USD57.88, down 7 cents. The 2025 average prices for both benchmarks are the lowest since 2020, LSEG data showed.
US crude stocks fell last week, but distillate and gasoline inventories grew more than expected, according to data from the US Energy Information Administration.
Crude inventories fell by 1.9 million barrels to 422.9 million barrels in the week ended December 26, the EIA said, compared with analysts’ expectations in a Reuters poll for an 867,000-barrel draw.
US gasoline stocks rose by 5.8 million barrels in the week to 234.3 million barrels, the EIA said, compared with analysts’ expectations for a 1.9 million-barrel build.? Distillate stockpiles, including diesel and heating oil, rose by 5 million barrels to 123.7 million barrels, versus projections of a 2.2 million-barrel rise.
Oil markets had a strong start to 2025 when former President Joe Biden ended his term by imposing tougher sanctions on Russia, disrupting supplies to major buyers China and India. The impact of the war in Ukraine on energy markets intensified when Ukrainian drones damaged Russian infrastructure and disrupted Kazakhstan’s oil exports.
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