Brent crude oil, against which Nigerian oil is priced, rebounded about 1% to near $76 a barrel on Thursday after data showed a drawdown in US crude oil stockpiles despite the weakening in the Chinese economy.
The latest data revealed that oil inventories at the Cushing, Oklahoma, hub had fallen to their lowest level since 2014.
Similarly, West Texas Intermediate (WTI) crude held above $73 per barrel as traders balanced the decline in the US stockpiles with broader concerns over global economic conditions.
China, the world’s largest crude importer has reported further declines in consumer inflation to nearing deflation territory.
Official figures released on Thursday indicated a 27th consecutive month of factory deflation, a significant hurdle for Beijing’s efforts to stimulate demand through fiscal and monetary measures.
Wayne Gordon, regional chief investment officer at UBS Group AG, said the market could expect continued uncertainty as the geopolitical and economic landscape evolves.
“I expect this volatility to go on into the inauguration,” he stated. This, he said while referring to the January 20 handover of power to President-elect Donald Trump. “The only thing we do sort of know is that he is unpredictable.”
Global Supply and Policy Uncertainty
The oil market has experienced a strong start to 2025, defying initial forecasts that predicted a year marked by a supply glut.
The increase in Brent crude oil to a mid-October high was due to falling US crude stockpiles, reduced exports from Russia, and apprehension surrounding Trump’s incoming administration.
Trump’s proposed trade and security agendas have amplified uncertainty, particularly regarding their potential impact on global oil flows.
The President-elect has also pledged to impose tariffs on Canadian imports despite their long-standing energy trade relationship.
In response, Canada’s Energy Minister Jonathan Wilkinson cautioned against an oil trade war and said nothing is off the table when it comes to retaliation.
“Nothing is off the table when it comes to retaliation,” Wilkinson warned.
