Oil prices rise on upbeat demand estimates from OPEC, IEA
Oil prices gained on August 11 amid optimistic demand forecasts from the OPEC producer group and the International Energy Agency (IEA). The IEA on Friday warned that global inventories could fall sharply over the rest of 2023, potentially driving prices even higher, though the Paris-based agency expects demand growth to slow to 1 million barrels per day (bpd) in 2024, down 150,000 bpd from its previous forecast, according to news agency Reuters.
Brent crude was up 37 cents, or 0.4 per cent, at $86.77 a barrel while US West Texas Intermediate (WTI) crude futures were up 40 cents, or 0.5 per cent, at $83.22. Both benchmarks have been on a sustained rally since June, with WTI trading on Thursday at its highest this year and Brent hitting its highest since late January.
Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for an August 21 expiry, were last trading higher by 0.9 per cent at ₹6,635 per bbl, having swung between ₹6,814 and ₹6,943 per bbl during the session so far, against a previous close of ₹6,873 per barrel.
The Organization of the Petroleum Exporting Countries (OPEC) had also said it expects global oil demand to rise by 2.25 million bpd in 2024, compared with growth of 2.44 million bpd this year. Both forecasts were unchanged from last month.
Market sentiment was also lifted by Thursday’s US consumer prices data for July, which fuelled speculation that the Federal Reserve is nearing the end of its aggressive rate hike cycle. The US dollar gained against its basket of major peers.
On the supply side, prices have been supported by extensions to output cuts by Saudi Arabia and Russia alongside supply fears driven by the potential for conflict between Russia and Ukraine to disrupt Russian oil shipments in the Black Sea region.
However, mixed economic data from China weighed on sentiment. While customs data showed crude imports up year on year, China’s overall exports plunged 14.5 per cent in July, with monthly crude imports retreating from June’s near-record highs to their lowest level since January.
Data this week also showed China’s consumer prices fell into deflation and factory gate prices extended declines in July, raising concerns about fuel demand in the world’s second-largest economy, according to Reuters.
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Updated: 11 Aug 2023, 10:14 PM IST
