Brent oil futures for delivery in February 2025 closed at $73.14 yesterday, down from $73.91 at the start of the trading session. This decline represents a 1.04% decrease, translating to a drop of approximately 77 cents.
In the 2025 State Budget (OGE), effective from January 1, the government has set a reference price of $70 per barrel and aims to maintain production above 1.1 million barrels per day.
According to Reuters, the oil and gas sector dropped by 1.3%, reaching its lowest level in 17 months, with falling oil prices attributed to economic data from China, reigniting concerns about demand.
Oil futures had already declined on Monday after hitting several-week highs. The drop followed weak consumer spending in China, the world’s largest oil importer, and investor caution ahead of the U.S. Federal Reserve’s interest rate decision.
Brent crude futures had closed at $73.91 per barrel, a decline of $0.58, or 0.8%, after rising to a peak not seen since November 22.
U.S. West Texas Intermediate (WTI) oil also fell by $0.58, or 0.8%, to $70.71 per barrel, following its highest level since November 7.
Last week, oil prices benefitted from expectations that production would tighten due to additional sanctions on Russian and Iranian oil producers, while potential interest rate cuts in the U.S. and Europe were expected to stimulate demand.
“Last week’s events were adequately priced in, and this week will likely bring fewer factors to support oil prices,” said Jim Ritterbusch, from Ritterbusch and Associates, based in Florida, USA.
Sales in China were slower than anticipated, adding pressure on Beijing to increase stimulus measures for its fragile economy, which is facing U.S. trade tariffs under the second Trump administration.
“It’s a very pessimistic scenario, with little hope for oil demand growth,” commented Bob Yawger, director of energy futures at Mizuho in New York.
