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Oil Prices Edge Up Amid Positive Global Demand Projections
Oil prices crept higher on Wednesday, bolstered by optimistic global demand forecasts from both the U.S. Energy Information Administration (EIA) and the Organization of the Petroleum Exporting Countries (OPEC). Brent crude futures saw a modest increase of 11 cents, or 0.1%, reaching $82.04 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rose by 18 cents, or 0.2%, closing at $78.10.
EIA and OPEC Forecasts
The EIA updated its world oil demand growth forecast for 2024, raising it to 1.10 million barrels per day (bpd) from a previous estimate of 900,000 bpd. Meanwhile, OPEC sustained its 2024 forecast for robust growth in global oil demand, attributing the anticipated surge to increased travel and tourism activities in the latter half of the year.
Last week’s oil prices slipped by more than 2% after OPEC and its allies announced plans to gradually lift output cuts starting in October. However, analysts at ANZ remarked that despite the planned output increase, market acceptance appears likely, driven largely by demand from China and other emerging economies.
U.S. Crude Oil Stocks and Market Dynamics
According to market sources referencing figures from the American Petroleum Institute (API), U.S. crude oil inventories fell by 2.428 million barrels in the week ending June 7. This decline surpassed expectations from a preliminary Reuters poll, which had predicted a drop of just over one million barrels. The EIA's official data release, anticipated later on Wednesday, will provide further clarity.
Economic Indicators and Market Sentiment
Investors are also keenly awaiting several significant economic reports. The Consumer Price Index (CPI) report is set to be released before market opening on Wednesday, followed by the U.S. Federal Reserve's policy announcement later in the day. A recently strong U.S. monthly jobs report has prompted market recalibration regarding the Federal Reserve's potential rate cuts, with the CME's FedWatch tool now indicating a 50% chance of a rate cut occurring in September.
In addition, Chinese producer and consumer price inflation figures will also be released, providing further insight into economic conditions and potential impacts on oil demand.
