By Adedapo Adesanya
Oil prices edged slightly higher on Tuesday as the United States government forecast record global petroleum consumption next year and as the US Dollar neared seven-month lows.
Brent futures rose 45 cents or 0.6 per cent to settle at $80.10 a barrel, while US crude ended 49 cents or 0.6 per cent higher at $75.12 per barrel.
The US Energy Information Administration (EIA) said in its Short-Term Energy Outlook that global consumption of liquid fuels is forecast to reach 102.2 million barrels per day in 2024, driven primarily by growth in countries like India and China, reflecting trends in economic activity.
The EIA said it expects global consumption of liquid fuels, such as gasoline, diesel, and jet fuel, to reach a record high next year.
It reduced its 2023 forecasts for US and global benchmark oil prices and also issued 2024 forecasts of $71.57 for WTI and $77.57 for Brent.
The oil market will also be awaiting clarity on the US Federal Reserve’s plans to raise interest rates after the central bank chairman, Mr Jerome Powell avoided comments on monetary policy and the economy at a symposium in Stockholm, Sweden.
Traders are now looking to US CPI data on Thursday for indications of the near-term outlook.
Support also came as crude prices continued to find support on expectations for higher demand out of China as the country scraps its COVID-19 restrictions.
Travel activity around the Lunar New Year holiday, which takes place between January 21 and 27, is expected to surge compared with the same period last year, with the main travel period generally 40 days around public holidays.
China has also opened its borders to international travellers again, which should go hand in hand with a recovery in oil demand
Crude oil inventories rose by 14.865 million barrels, American Petroleum Institute (API) data showed on Tuesday, as refining activity begins to return to normal following previous weather-related shutdowns.
US crude inventories increased by 13 million barrels over the course of 2022, according to API data, while crude stored in the nation’s Strategic Petroleum Reserves sunk by 221 million barrels.
The official EIA data will be released later on Wednesday.
