London — Having ended 2024, and begun 2025, in strong fashion, some wind has come out of crude’s sails over the last couple of sessions, amid headwinds stemming from a chunky build in US inventories, as well as profit taking upon a brief move north of $75bbl in WTI, as the front future traded to its highest since October.
For crude, the near-term outlook hinges largely on the same factors that drove the market last year, chiefly the demand outlook, and whether the Chinese economy is, at long last, able to embark on a stable and durable economic recovery, with lingering geopolitical risks likely to limit significant downside for now.
Focus will also fall on President-elect Trump’s early policy decisions, and whether the ‘drill baby, drill’ campaign rhetoric does indeed come to fruition.
*Michael Brown Senior Research Strategist at Pepperstone
