The price of WTI crude oil fell to its lowest level since 2021. The market reacts to forecasts
The price of oil in 2025, apart from the mid-year jump, is still falling. It's no different in December, when we recorded a strong depreciation and a decline to levels we haven't seen in years.
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As a result of recent declines the price of WTI crude oil reached a minimum of $54.98. per barrel, which is the lowest value since February 3, 2021. The American benchmark recorded a decline of 2.36%, ending the day at $55.48. In turn, the price of Brent crude oil was USD 59.13, which also meant a decline of 2.36%.
The drop in oil prices may be a signal of an economic slowdown. In November, 64,000 people arrived in the United States. new jobs, but in October this number decreased by 105,000. The unemployment rate reached its highest level in four years, at 4.6 percent.
Crude oil is the cheapest in years
In 2023, American WTI crude oil lost approximately 23%. its value, which is the worst result since 2018. Brent crude oil, in turn, recorded a decline by approximately 21%, which is the worst result since 2020.
Meanwhile, gasoline prices in the US dropped below $3. per gallon, hitting a four-year low, providing relief to consumers ahead of the holiday season – according to data from the AAA drivers' association.
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The pressure on the oil market this year resulted from, among others, from the decision of OPEC+ members, who sharply increased production after years of production restrictions. Additionally, investors take into account the possibility of reducing geopolitical risk, including a potential peace agreement between Ukraine and Russia. President Donald Trump is taking steps to persuade Ukraine to accept such a solution.
The war in Ukraine casts a shadow on the oil market
The situation on the oil market has remained tense since Russia invaded Ukraine in 2022. Kiev has carried out numerous drone attacks on Russian oil infrastructure, and the United States and its European allies have imposed sanctions on the Russian oil industry. Expert Jorge Leon from Rystad Energy noted that reaching an agreement could quickly reduce the risk of supply disruptions from Russia. Leon added that if sanctions were lifted, a significant amount of Russian oil, currently stored on water, could return to the market. According to Rystad data, Russian oil reserves stored in this way currently amount to approximately 170 million barrels.
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The lifting of sanctions could also affect the OPEC+ strategy. Leon emphasized that the group could return to efforts to regain market share by increasing production, which had previously been suspended.
