By Adedapo Adesanya
The two major crude oil grades rose by more than 1 per cent on Monday after the Organisation of the Petroleum Exporting Countries (OPEC) monthly market report eased worries about waning demand.
During the session, Brent crude futures increased by $1.09 or 1.3 per cent to $82.52 a barrel and the US West Texas Intermediate (WTI) crude futures also gained $1.09 or 1.4 per cent to close at $78.26 per barrel.
In a monthly report, OPEC said oil market fundamentals remained strong and blamed speculators for a drop in prices.
The Monthly Oil Market Report (MOMR) released yesterday stated that the cartel sees fundamentals as strong, expecting an increase in Chinese crude imports to a new yearly record this year and dismissing negative market sentiment as overblown.
The group also made a slight increase to its 2023 forecast for global oil demand growth and stuck to its relatively high 2024 prediction.
The cartel revised its forecast for oil demand growth for 2023 slightly higher by 20,000 barrels per day from last month’s estimate and now sees global oil demand growing by 2.5 million barrels per day this year, thanks to upward revisions to China’s oil demand in the second half.
For 2024, world oil demand is expected to grow by a healthy 2.2 million barrels per day, unchanged from the previous month’s assessment, OPEC said.
Additionally, OPEC’s MOMR showed that the cartel’s crude oil production rose in October by 80,000 barrels per day compared to September. However, output from countries bound by the OPEC+ pact was still below agreed-upon levels.
OPEC’s 13 members averaged production of 27.9 million barrels per day in October, with the 80,000 barrels per day increase as a result of output from Angola, Iran and Nigeria, while output fell in Libya, Saudi Arabia and Kuwait.
Oil prices were also lifted by reports of the US Treasury Department cracking down on Russian oil exports. According to reports, it sent notices to ship management companies for information on 100 vessels it suspects of violating Western sanctions on Russian oil.
Last week, top oil exporters Saudi Arabia and Russia confirmed they would continue with additional voluntary oil output cuts until the end of the year as concerns over demand and economic growth continue to drag on crude markets.
The next OPEC+ meeting is scheduled for Sunday, November 26.
