The price of West Texas Intermediate (WTI) experienced a 1.2% drop towards the end of last week, reflecting tensions in the global energy markets which traders need to be aware of.
According to energy analysts, this weekly decline stems from a landscape shaped by supply and demand concerns, where OPEC+ production policies and economic indicators play a crucial role.
Despite the OPEC+ cartel’s efforts to control production, fears of a supply surplus in 2025 continue to put downward pressure on prices.
On Thursday OPEC+ announced the extension of production cuts until the end of 2026 and postponed production increases until April 2025. However, this strategy has not alleviated concerns about weak demand, particularly in China, the world’s second-largest oil consumer. The Asian giant’s economic slowdown has significantly impacted energy market expectations, directly affecting WTI prices.
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WTI futures trading in a narrow range
Over the past few weeks, WTI has traded within a narrow range, primarily influenced by geopolitical and economic factors. Tensions in the Middle East, traditionally a catalyst for oil price increases, have been offset by fears of global economic stagnation. Economic uncertainty and China’s sluggish recovery have prevented any significant uptick in WTI’s value.
“Despite OPEC+ efforts to manage the balance between supply and demand, market players view the measures taken so far as insufficient to counteract the impact of weaker global demand,” said Antonio Di Giacomo, Senior Market Analyst at XS.com. “This reinforces the outlook that WTI prices could remain under downward pressure in the short term, especially if global economic indicators fail to show improvement.”
In this context, WTI faces a complex dynamic where macroeconomic uncertainties, policy decisions by major producers, and evolving geopolitical tensions converge. These variables will continue to shape market behaviour in the coming weeks, with significant implications for energy industry stakeholders and investors.
Speaking to us on Monday, Di Giacomo said that he thought the WTI market reflects “a scenario of uncertainty” where OPEC+ efforts have not reversed the bearish pressure driven by weak global demand. The evolution of economic and geopolitical factors will be key in determining whether crude oil prices can stabilize or face further declines shortly.
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