Oil wipes gains amid weak demand fears; Brent below $76

Oil drilling rigs

Oil turned lower wiping off early gains today, Jan. 2, as fresh data renewed fears of weak demand as industrial activity contracted in major economies. The decline came despite the continuing geopolitical tensions in the Middle East.

Brent crude futures for March delivery dropped 1.5%, or $1.15, to close at $75.89 per barrel, after rising to $79.06 during the day.

WTI crude for February delivery slumped 1.75%, or $1.27, to $70.38 per barrel, after touching an intra-day high of $73.64.

Industrial activity in the United States, the Eurozone, and the United Kingdom contracted in December, as shown by the final reading of the industrial purchasing managers’ index issued by S&P Global, which came below the level of 50 points (the border between growth and contraction).

The US Energy Information Administration said in a report that the average price of Brent crude reached approximately $83 per barrel in 2023, down from $101 per barrel in 2022, a difference of $19 per barrel after mathematical rounding operations.