Oil prices hover near two-week low
- By Reuters -
- Jan 28, 2025
Oil prices edged higher but remained near a two-week low on Tuesday, as weak economic data from China and rising temperatures elsewhere dampened demand prospects. Supporting prices was a disruption of oil loading operations in Libya.
Brent crude oil futures were up 55 cents, or 0.70%, to $77.63 per barrel at 1236 GMT. U.S. West Texas Intermediate crude futures were up 49 cents, or 0.67%, to $73.66.
Brent settled on Monday at its lowest since Jan. 9, while WTI hit its lowest since Jan. 2.
In Libya, local protesters prevented crude oil loading on Tuesday at Es Sidra and Ras Lanuf ports, five engineers and a shipping source told Reuters, putting about 450,000 barrels per day of exports at risk.
“If such disorder spreads, which is not unusual when Libya’s oil industry is held to ransom by one group or another, the current National Oil Corporation evaluated production of 1.4 mbpd will come under threat,” said analyst John Evans at oil broker PVM.
On the other hand, China, the world’s largest crude oil importer, reported on Monday an unexpected contraction in January manufacturing activity, adding to concerns over global crude demand growth.
“The general tone of caution in the risk environment, coupled with weaker Chinese PMI numbers that cast further doubt on China’s oil demand outlook, may serve as a drag on oil prices,” IG analyst Yeap Jun Rong said.
China’s crude oil demand is also expected to be hit by the latest U.S. sanctions on Russian oil trade. FGE analysts see refineries in Shandong losing up to 1 million barrels per day of crude supply in the near term amid a ban imposed by the Shandong Port Group on U.S.-sanctioned tankers.
Several independent refineries in China have halted operations, or plan to do so, for indefinite maintenance periods, sources told Reuters, as new Chinese tariff and tax policies plunge plants deeper into losses.
In the US, weather forecasts are for warmer than normal temperatures through this week, which are also weighing on demand for heating fuels after extreme cold sparked a natural gas and diesel rally in prior sessions.
Broader financial markets were under pressure from a surge of interest in a low-cost artificial intelligence model launched by Chinese firm DeepSeek.
“Losses (in the oil market) appear relatively limited from the turmoil in U.S. tech stocks,” IG’s Yeap said.
However, oil markets remain jittery, and there is some time to play out before there is clarity on the ramifications of U.S. policy involving tariffs and sanctions, said Ashley Kelty, an analyst at Panmure Liberum.