Last U.S. Crude Inventory Data Of 2024 Lifts Oil Prices By Over 1%

As oil markets turn their attention to the year ahead, crude inventories stateside have perhaps offered the final pointer of 2024 marginally lifting futures prices in a largely flat week of characteristically low trading associated with the festive season.

In a scheduled data release on Friday, the U.S. Energy Information Administration said the country’s crude oil inventories fell by 4.2 million barrels (to 416.8 million barrels) in the week ended December 20.

The statistics arm of the U.S. Department of Energy attributed the higher call on inventories to refiners upping their throughput to meet higher consumer demand for fuels during the festive season.

The EIA inventory dip figure was several times higher than a decline of 900,000 barrels for the prior week, and compared favorably with a draw downwards of 3.2 million barrels estimated by the the American Petroleum Institute for the week to December 20.

On the back of the EIA inventories data release, the Brent front month crude futures contract settled $0.91 or 1.2% higher at $74.17 per barrel, while the West Texas Intermediate futures contract settled at $70.60 per barrel, higher by $0.98 or 1.4%.

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It put Brent – considered the global proxy benchmark – higher by 1.9% over the past five days, but still down by over 3% year-to-date, and over 7% on a 12-month basis.

However, some of latest week’s price buoyancy may also be attributed to optimism over China’s potential economic performance in 2025. That’s after the World Bank upgraded its economic growth forecast for the country overnight.

It now estimates China’s economic growth at 4.9% in 2024 (up from a forecast of 4.8% made in June) and projected it to be at 4.5% in 2025. Meanwhile, Reuters reported this week that Beijing had agreed to issue a record CNY3 trillion ($411 billion) in special treasury bonds in 2025.

The figure will not be formally revealed until the annual meeting of China’s National People’s Congress in March 2025, and could still change before then, the newswire added. China’s own ambition is for a 2025 growth target of 5%.

But as the World Bank noted: “While recent policy easing measures are expected to provide moderate support, subdued household and business confidence, along with headwinds in the property sector will continue weighing on growth in 2025.

“Structural constraints to growth include low consumption, high debt levels among property developers and local governments, and an ageing population.”

And market doubts persist over whether an improved economic outlook for China for next year may actually result in higher demand from the world’s leading oil importer.

That’s after near-term demand concerns over China were recently amplified by Sinopec following the state-owned refiner’s market assessment that the country’s crude imports could peak as soon as next year.

It also noted that China’s oil consumption may well peak by 2027, with a further weakening in consumer demand for diesel and gasoline. As things stand, Beijing currently appears to be importing 300,000 bpd less as the end of Q4 2024 approaches, compared to Q4 2023.