Oil Prices: LONDON, Nov 14 (Reuters) – Oil prices mainly remained flat on Thursday, following a decline earlier this week. Traders exercised caution as they navigated the complexities of a strengthening U.S. dollar and growing global oil supply, raising concerns about future demand growth.
At 0937 GMT, Brent crude futures were down by 3 cents to $72.25 per barrel, while U.S. West Texas Intermediate (WTI) crude futures dropped by 7 cents, settling at $68.36 per barrel. Despite the slight dip, oil prices showed little movement, reflecting market uncertainty.
U.S. Dollar Surge Dampens Oil Price Outlook
A significant factor influencing oil prices remains the movement of the U.S. dollar. According to Phillip Nova investment analyst Danish Lim, the recent surge in the dollar has placed significant downward pressure on oil. As the dollar strengthens, oil becomes more expensive for holders of other currencies, dampening demand. Lim expects this trend to continue, with oil markets likely to remain volatile and biased toward bearish sentiment. 
On Thursday, the U.S. dollar rose to a one-year high, extending its rally after data showed U.S. inflation in October matched expectations. The resulting fears of a potential slowdown in U.S. economic activity have contributed to concerns about weaker demand for oil in the future.
Read more: Top Best 20 Jobs Trending in 2025 for the Future of Work.
Economic Concerns Raise Fears of Lower Oil Demand
Adding to the caution surrounding oil prices, senior market analyst Kelvin Wong from OANDA noted that several economic factors combined to stoke fears of lower demand. In particular, a surge in U.S. 10-year Treasury yields and a sharp increase in the 10-year breakeven inflation rate to 2.35% are contributing to the expectation that the Federal Reserve may adopt a shallower interest rate cut cycle in 2025. This outlook is expected to reduce liquidity, which could suppress oil demand.
These developments signal that traders are hedging their bets as the global economy faces uncertainty, putting pressure on oil prices.
Rising Global Oil Supply Could Pressure Prices Further
On the supply side, the U.S. Energy Information Administration (EIA) recently updated its global oil output forecast for 2024, predicting a slight increase to 102.6 million barrels per day (bpd), up from the earlier estimate of 102.5 million bpd. This rise is primarily driven by a projected 300,000 bpd increase in U.S. oil production. The EIA also anticipates global oil output will climb to 104.7 million bpd in 2025.
While the increase in U.S. production contributes to supply growth, it adds to the broader concerns about global oil oversupply, which may limit price gains.
Oil Prices: Weak Demand from China Further Clouds Oil Market Outlook
Independent market analyst Tina Teng pointed out that demand from China, a major global oil consumer, continues to slow. This weak demand and rising global supply leave little room for positive price movement in the oil markets. The combination of stagnant demand from vital global economies and increasing production creates a challenging environment for oil prices to gain momentum.
In summary, oil prices remain under pressure as the U.S. dollar strengthens, global oil supply increases, and demand growth falters, particularly in China. With market uncertainty high, oil traders are bracing for continued volatility.
