2024-01-18 05:19:13
Oil prices rose on Thursday as OPEC forecast relatively strong growth in global oil demand over the next two years, and the market focused on U.S. oil production disrupted by a cold snap, as well as to geopolitical tensions in the Middle East.
Brent oil futures gained 21 cents, or 0.3 percent, to $78.09 a barrel by 0505 GMT, while West Texas Intermediate oil futures rose 40 cents, or 0 .6%, at $72.96.
OPEC, in a monthly report, said global oil demand is expected to increase by 1.85 million barrels per day (bpd) in 2025 to reach 106.21 million bpd. For 2024, OPEC forecasts demand growth of 2.25 million bpd, unchanged from its December forecast.
However, price gains have been limited so far as the market considers mixed factors.
“Brent prices remain broadly stuck in a range as they have been over the past two weeks, as market participants struggle to weigh mixed supply and demand dynamics with geopolitical tensions current events,” said Yeap Jun Rong, market strategist at IG.
An unexpected rise in U.S. crude inventories and difficult recovery conditions in China continue to cast a shadow over the oil demand outlook, Yeap said, although the market remains cautious about geopolitical developments.
Amid the latest tensions, Pakistan has carried out strikes inside Iran targeting Baloch militants, a senior intelligence official told Archyde.com on Thursday, two days after Iran carried out strikes inside Pakistani territory.
Meanwhile, in North Dakota, America’s top oil-producing state, temperatures below zero degrees Fahrenheit (minus 18 degrees Celsius) caused oil production to fall by 650,000 to 700,000 bpd, or less than half of its usual production, the state said.
U.S. government oil inventory data is due at 11 a.m. ET (1600 GMT) on Thursday. Domestic crude inventories increased last week by 480,000 barrels, according to market sources citing figures from the American Petroleum Institute on Wednesday.
The International Energy Agency (IEA) expects oil markets to be in a “comfortable and balanced position” this year despite tensions in the Middle East, amid rising supply and of slowing demand growth, its executive director, Fatih Birol, told the Archyde.com Global Markets Forum on Wednesday.
Attacks by Yemen’s Houthis on shipping in the Red Sea have forced many companies to divert cargo to Africa, increasing journey times and costs. The United States carried out a new series of strikes on Houthi targets in Yemen on Wednesday in retaliation for attacks on ships.
The Houthis, aligned with Iran, say they are acting in solidarity with the Palestinians in Israel’s ongoing war against Gaza. (Reporting by Stephanie Kelly in New York and Jeslyn Lerh in Singapore; Writing by Tom Hogue and Jamie Freed)
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