WTI oil prices have continued to decline, trading near $72.90 per barrel during the Asian session on Tuesday. Despite rising energy demand driven by colder weather and China’s economic stimulus efforts, these factors present a complex environment for oil markets.
OPEC’s oil production fell in December due to the UAE’s supply cuts, which may support prices in the short term. The Biden administration is imposing new sanctions to target Russian oil revenues, further complicating the global oil supply chain. Bullish factors such as OPEC’s cuts and China’s fiscal policies may offer potential support.
Colder weather and China’s economic stimulus efforts drive higher energy demand, particularly in the world’s largest crude importer. Beijing’s plan to enhance its fiscal stimulus, including substantial funding for business investment and consumer spending, is expected to support oil demand soon.
OPEC’s total output fell by 120,000 barrels per day (bpd) to 27.05 million bpd in December, aligning with the cartel’s strategy of limiting output to support prices amid a weak demand outlook and abundant US supplies.
