Global oil prices are on track for their deepest annual decline since the 2020 pandemic. The main pressure comes from market concerns about a large supply surplus, which is expected to continue to cloud trade well into the new year. The US benchmark, West Texas Intermediate (WTI), fell below US$58 per barrel, down nearly 20% so far this year. Meanwhile, Brent for March delivery remained around US$61 per barrel.

In the short term, market participants' attention is focused on the OPEC+ meeting scheduled for January 4th. Furthermore, negative US oil industry reports have weighed on sentiment. Data from the American Petroleum Institute showed a 1.7 million barrel surge in crude oil inventories last week, accompanied by increases in gasoline and distillate stocks, indicating weak demand.

Throughout this year, oil prices have continued to weaken as supply from OPEC+ and competing countries has increased, while global demand growth has slowed. Several major institutions, including the International Energy Agency, predict a significant oversupply next year. Even OPEC itself projects a surplus, albeit on a more moderate scale.

Beyond economic factors, geopolitical conditions also influence the market. The United Arab Emirates announced it would withdraw its troops from Yemen amid rising tensions with Saudi Arabia, another key OPEC member. Meanwhile, the market is also monitoring the United States' move to block some Venezuelan oil shipments and political pressure on President Nicolas Maduro's government, adding to uncertainty about the future direction of oil prices. (az)

Source: Newsmaker.id