Africa (Commonwealth) _ Oil traders across the globe are encouraged by OPEC’s forecasts that the world’s oil demand would expand strongly this year, and the break over the technical barrier suggests that there may be more upward momentum.
The increase in oil prices was accompanied by a general decrease in risk aversion, as seen by US statistics indicating that inflation is still high and lowering the likelihood of impending interest rate decreases.
According to Rebecca Babin, a senior energy trader at CIBC Private Wealth, it was an uncommon day for oil to separate from stocks. Last week, positioning—which has been more crucial for the direction of the oil price—was reduced, and this week’s gains in inventories are anticipated to moderate the rise.
The group’s new production cutbacks were only partially implemented in the first month, according to the Organization of the Petroleum Exporting Countries’ monthly report, which was released earlier today. Early next month, the larger OPEC+ coalition will decide whether to continue its cuts into the second quarter.
Although oil has increased this year, a significant increase has not yet occurred. An unclear demand picture and abundant supply from outside the group have essentially countered the OPEC cuts, as well as anxiety over the Middle East war and attacks on ships in the Red Sea.
Costs:
In New York, WTI for March delivery increased 1.2% to close at $77.87 a barrel.
At $82.77 per barrel, Brent for April settlement saw a 0.9% increase in value.
Meanwhile, according to ship-by-ship tracking, a portion of the enormous fleet of tankers that Russia employs to transport its petroleum is coming to a grinding halt as a result of US sanctions. That is just another indication that Moscow may be beginning to feel the impact of more stringent regulations from Western regulators.
Additionally, traders are analyzing the crude supply and demand forecast from the International Energy Agency. According to agency forecasts, by 2024, there would be a 1.2 million to 1.3 million barrels per day rise in global consumption, easily matched by rising output from the Americas. According to the senior OPEC official, there won’t be a peak in oil consumption anytime soon, and global oil demand will continue to expand strongly this year.
At a panel discussion during the World Governments Summit in Dubai on Tuesday, OPEC Secretary-General Haitham Al Ghais stated, “We are seeing positive signs of good revisions to some parts of the global economy, most notably the United States.” “I think it’s probably a long way off to talk about peak oil demand.”
Additionally, traders are analyzing the crude supply and demand forecast from the International Energy Agency. According to agency forecasts, by 2024, there would be a 1.2 million to 1.3 million barrels per day rise in global consumption, easily matched by rising output from the Americas.
According to the senior OPEC official, there won’t be a peak in oil consumption anytime soon, and global oil demand will continue to expand strongly this year.
At a panel discussion during the World Governments Summit in Dubai on Tuesday, OPEC Secretary-General Haitham Al Ghais stated, “We are witnessing indications of good adjustments to certain regions of the world’s economy, most notably the United States.” “I think it’s probably a long way off to talk about peak oil demand.”
A number of prominent analysts anticipate that as nation’s transition to renewable energy and electric cars in an attempt to prevent catastrophic climate catastrophe, oil consumption will peak in the upcoming years. Before the decade is out, the International Energy Agency in Paris predicts a peak. One significant exception to this theory has been the Organization of Petroleum Exporting Countries.
According to Al Ghais, “We still feel very robust” about China and see India’s remarkable economic progress. According to him, OPEC projects that the world’s oil consumption would rise by more than 2 million barrels per day this year, continuing the steady increase that was observed in 2023.
The need for oil has increased during the last several years due to the recovery of the market for transportation fuels following the epidemic. However, as supplies from abroad meet the rise in demand, OPEC and its partners have been tightening their production limits, and oil prices in London have stayed in the neighborhood of $80 per barrel.
Good output is being produced in Guyana, Brazil, and Canada, according to Al Ghais. Although he issued a warning, the US output increase may slow down since the sector has shown to be “resilient” and “we keep seeing a surprise in shale production, year on year.” OPEC+ would “continue to be very preemptive, proactive” in this context, according to Ah Ghais.
