December 4, 2024 (Investorideas.com Newswire) Investorideas.com, a go-to platform for big investing ideas releases market commentary from Quasar Elizundia, Expert Research Strategist at Pepperstone.
"Oil prices are once again under pressure due to uncertainty surrounding OPEC+ production plans, a factor that has caused a bearish sentiment among investors and could continue to exert downward pressure on crude prices. The U.S. benchmark blend, for instance, is losing more than one percent in today's session, trading around $69 per barrel. This movement also stems from mixed data on U.S. oil inventories, which have failed to dispel traders' doubts, as they remain focused on demand and its future levels.
Concerns over demand are further fueled by weaker-than-expected U.S. economic data. The ISM services PMI for November showed a sharper decline than anticipated, falling to 52.1 from 56 in the previous month, underscoring the slowest growth in the sector over the past three months. This indicator is also feeding doubts about a potential slowdown in energy demand, which could translate into additional pressure on crude prices.
Meanwhile, the Energy Information Administration (EIA) report revealed that refinery activity averaged 16.9 million barrels per day, while gasoline production fell to 9.5 million barrels per day, consistent with seasonal demand changes. Additionally, U.S. crude imports increased to 7.3 million barrels per day, highlighting the relative dependence on external sources. This factor, notably, could benefit oil-exporting economies like Mexico and Colombia in the LATAM region.
From a broader perspective, 2025 appears to be a challenging year for the oil market. The potential pursuit of increased oil production in the U.S., as suggested by Scott Bessent, Secretary of the Treasury-elect, could add further pressure on prices, complicating the situation for global producers. Traders will undoubtedly keep a close watch on OPEC+'s next moves and policy decisions in Washington, both of which will play a key role in determining the trajectory of oil prices in the coming months."
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