More Forecasts For 2025 Surplus Cause More Declines In Crude Prices

But troubled Syria is in the midst of a supply squeeze: File Image/Pixabay

With another noted analyst predicting an oil surplus this year, crude prices on Monday maintained its familiar trajectory – downward – although the drop was minimal.

Brent  settled down 31 cents at $72.63 per barrel, while West Texas Intermediate crude futures settled down 22 cents to $69.24 per barrel.

Macquarie analysts in a December report stated that Brent will trade at an average of $70.50 per barrel in the New Year, down from 2024's average of $79.64, because of a global inventory surplus.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, had a slightly more severe take on the situation: he stated in a note, "The ongoing narrative of weak - and weakening - global demand and ample global supply should maintain oil prices in the bearish consolidation zone for now, with, however, a limited downside potential near the $67 [per barrel] level."

Other analysts noted that even the sabre-rattling of U.S. president-elect Donald Trump failed to energize a moribund market, case in point being his complaint and accompanying threats of a takeover that the Panama Canal is charging "exorbitant" fees.

Rebecca Babin, senior energy trader at CIBC Private Wealth Group, said, "The market is largely dismissing the Panama Canal headlines as rhetoric for now, with greater attention shifting to supply-and-demand fundamentals shaping the outlook for 2025."

Slightly better news for Monday was provided thanks to data from the US Commodities Futures Trading Commission, which showed that hedge funds were growing more bullish, with their net-long position on West Texas Intermediate crude rising by the most in more than a year in the week to Dec. 17.

In other oil news on Monday, a member of the Iraqi parliament said on social media that Iraq has suspended crude deliveries to Syria, over security concerns in that country resulting from being taken over by Islamist groups.

Syria has been importing 120,000 barrels per day (bpd) of crude from Iraq and now faces a supply squeeze that is aggravated by the halt to internal deliveries of crude from eastern Syria, controlled by the Kurdish Syrian Democratic Forces, to the rest of Syria, which is under the control of the Hay'at Tahrir al-Sham group.