Author: Emily Zhou
SINGAPORE (Reuters) – Oil prices edged higher on Wednesday on optimism about global demand from the U.S. Energy Information Administration and OPEC, with industry data showing U.S. crude inventories fell more than expected last week.
U.S. West Texas Intermediate (WTI) crude futures were up 37 cents, or 0.45%, at $82.29 a barrel by 0400 GMT, while U.S. West Texas Intermediate (WTI) crude Crude oil futures rose 46 cents, or 0.6%, to $78.36.
EIA raised its forecast for world oil demand growth in 2024 to 1.1 million barrels per day from the previous 900,000 barrels per day, while the Organization of the Petroleum Exporting Countries (OPEC) maintained its forecast for relatively strong growth in global oil demand in 2024, citing expectations that Travel and travel half the year.
Oil prices fell more than 2% last week after OPEC and its allies said they would phase out production cuts starting in October.
“Crude oil edged higher as OPEC maintained its forecast for stronger demand,” ANZ analysts said in a note, adding that oil demand was likely to be driven by China and other emerging economies.
“Despite last week’s announcement that some voluntary cuts would begin to be phased out later this year, its forecasts suggest it should be easily accepted by the market.”
At the same time, market sources quoted data from the American Petroleum Institute as saying that U.S. crude oil inventories fell by 2.428 million barrels in the week ended June 7. The drop exceeded expectations of analysts polled by Reuters.
Data from the U.S. government statistics agency EIA will be released at 10:30 a.m. ET (1430 GMT) on Wednesday.
Investors are also looking forward to a U.S. consumer price index report before the market closes on Wednesday, as well as a U.S. central bank policy announcement later in the day.
Independent market analyst Tina Teng said, “Expectations of a dovish stance by the Federal Reserve at the upcoming meeting should support today’s upward momentum in oil prices, as a dovish stance will stimulate economic growth and boost oil demand.”
“However, a slowdown in the global economy may remain a bearish factor in the longer term.”
In China, the world’s largest crude oil importer, consumer inflation remained stable in May while declines in producer prices slowed, signaling that Beijing needs to do more to support weak domestic demand and an uneven economic recovery.
