Topic 3: CRUDE: SLIPPERY STRIDE

Crude oil prices saw notable fluctuations in December 2024, influenced by a mix of supply-demand dynamics, geopolitical tensions, and economic conditions. Brent Crude ranged between $74 and $90 per barrel, settling at $74.64 on the last trading day of the year. This marked a 3% decline from the previous year’s closing price of $77.04. Oversupply was a key factor driving the decline, with increased production from the U.S. and non-OPEC countries outpacing demand. OPEC’s decision to maintain production levels despite declining prices contributed to this surplus. Recovery in demand post-pandemic was hindered, especially due to economic slowdowns in major economies like China. While China’s manufacturing activity showed signs of growth, overall demand remained weak, causing concerns about future consumption. Geopolitical tensions, particularly U.S. military actions linked to Iran-backed threats affecting shipping routes, caused short-term volatility but had little impact on the overall supply-demand balance. The global market also reacted to pessimistic economic signals, which led traders to revise their oil demand outlook. Despite declines in U.S. crude stocks, which typically support prices, these gains were often offset by supply concerns. In conclusion, December’s crude oil prices were shaped by a complex blend of seasonal factors, geopolitical instability, economic indicators, and supply-demand imbalances, highlighting the ongoing uncertainty in the global energy market.



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