Oil was little changed as weak demand offset supply risks caused by sanctions By Reuters

(Reuters) – Oil prices were little changed in Asian trade on Thursday as forecasts of weak demand and a bigger-than-expected rise in U.S. gasoline and distillate inventories stemmed from an additional round of EU sanctions threatening Russian oil flows.

futures were up 14 cents at $73.66 a barrel at 0519 GMT. U.S. West Texas Intermediate crude futures were up 6 cents at $70.35. Both indicators rose by over $1 on Wednesday.

On Wednesday, OPEC cut its demand growth forecast for 2025 for the fifth month in a row and by the largest amount yet.

“Investors will closely monitor the IEA’s market balance estimates for 2025, which will reflect the recent OPEC announcement,” ANZ analysts said in a note on Thursday.

In the world’s largest oil consumer, the United States, inventories of gasoline and distillates rose more than expected last week, according to data from the Energy Information Administration.

Weak demand, especially from top importer China, and rising supply outside OPEC+ were two factors behind the move. However, investors expect an increase in Chinese demand after Beijing unveiled plans this week to adopt “reasonably loose” monetary policy in 2025, which could boost oil demand.

Global oil demand grew more slowly than expected this month but remained resilient, JPMorgan analysts said in a note on Thursday.

“Growth (in oil demand) over the past week has been moderated by a slight decrease in jet fuel consumption in much of the world,” the note said.

China’s crude oil imports also rose year-on-year for the first time in seven months in November, up more than 14 percent from a year earlier.

The market will now watch for hints of an interest rate cut by the US Federal Reserve next week.

Prices rose on Wednesday after European Union ambassadors agreed to a 15th package of sanctions against Russia over its war against Ukraine. They targeted a “shadow fleet” of ships that helped Russia circumvent a $60-a-barrel price cap imposed on Russian shipping by the G7 in 2022 and helped keep Russian oil afloat.

The Kremlin said reports of a possible tightening of U.S. sanctions on Russian oil suggest that President Joe Biden’s administration wants to leave a difficult legacy for U.S.-Russia relations.

Treasury Secretary Janet Yellen said on Wednesday that the US continues to look for creative ways to reduce Russia’s oil revenue, adding that lower global demand for oil has created an opportunity for additional sanctions.