Crude Oil Prices Dip Amid Global Demand Concerns

Crude Oil Prices Dip Amid Global Demand Concerns

VoM News Desk | January 22, 2024 | 01:03 PM IST | Breaking News | Follow on Google News

Crude Oil Prices Dip Amid Global Demand Concerns/AP

Crude Oil Prices Dip Amid Global Demand Concerns

Global crude oil prices experienced a decline on Monday, influenced by persistent concerns about demand that outweighed geopolitical tensions in West Asia and an attack on a Russian fuel export terminal. The March Brent contract traded at $78.34, marking a 0.28% decrease, while the February West Texas Intermediate (WTI) contract was down 0.34% at $73.16 per barrel.

US EIA’s Projection on Liquid Fuels Demand

The US Energy Information Administration (EIA) projected a decrease in global liquid fuels demand over the next two years. The forecast indicated a growth of 1.4 million barrels per day (mb/d) and 1.2 mb/d in 2024 and 2025, respectively, compared to a 1.9 mb/d growth expected in 2023. The slowdown is attributed to factors like China’s slowing GDP growth, increased vehicle fleet efficiency, and the conclusion of pandemic recovery-related growth in 2023.

Considerations for Refiners Amidst Market Dynamics

The EIA report highlighted that although immediate impacts on near-term oil supplies seem limited, refiners are contemplating alternative routes to ensure uninterrupted feedstock supply. This contemplation could potentially lead to heightened insurance costs and squeezed refining margins, impacting the industry.

The impact on Russian oil flows to India has been minimal, with no significant diversions observed thus far. This news is particularly significant for India, a net importer of crude oil, where approximately 85% of energy requirements are met through imports. The ease in international oil prices provides relief for India in this context.

VoM News Desk

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