Adedapo Adesanya
By Adedapo Adesanya
Oil settled slightly higher on Tuesday as the US Energy Information Administration (EIA) raised its global oil demand growth forecast for the year just as the Organisation of the Petroleum Exporting Countries (OPEC) stuck to its forecast for relatively strong growth in 2024.
Brent crude futures rose by 29 cents or 0.4 per cent to $81.92 a barrel while the US West Texas Intermediate (WTI) crude futures gained 16 cents or 0.2 per cent to quote at $77.90 a barrel.
The EIA raised its 2024 world oil demand growth forecast to 1.10 million barrels per day from a previous estimate of 900,000 barrels per day.
OPEC maintained its 2024 forecast for relatively strong growth in global oil demand, citing expectations for travel and tourism in the second half.
The EIA sees OPEC and its allies known as OPEC+ largely adhering to its production targets announced earlier this month and expects US crude oil production to average 13.2 million barrels per day in 2024—an increase of 2 per cent from 2023 levels.
“We expect that OPEC+ crude oil production will follow these new targets until 2025. At that time, we expect that some OPEC+ producers will keep production below the targets to limit global oil inventory builds,” the EIA said in its report.
According to market sources citing American Petroleum Institute (API) figures, US crude oil stocks fell by 2.428 million barrels in the week ended June 7. Official data from the EIA will be released later on Wednesday.
Also, the World Bank said the US economy’s stronger-than-expected performance prompted it to lift its 2024 global growth outlook slightly, but warned overall output would remain well below pre-pandemic levels through 2026.
Mostly strong US economic data and inflation still higher than the US Federal Reserve’s 2 per cent target has pushed financial markets to limit expectations to only two 25-basis points rate reductions this year, likely starting in September.
US consumer prices data for May and the conclusion of the Fed’s two-day policy meeting are both scheduled for Wednesday.
Traders were also cautious a day ahead of the release of macroeconomic data from China after Saudi crude exports to China fell for a third straight month.
On the geopolitical front, Reuters reported that Hamas accepted a UN resolution backing a plan to end the war with Israel in Gaza and was ready to negotiate details.
