Oil Prices Rise as IEA Lifts Demand Growth Forecast
Oil Demand and Dollar Decline Drive Price Surge
Oil prices increased by about 1% to reach a one-week high following the International Energy Agency’s (IEA) improved demand growth forecasts and a decrease in the U.S. dollar due to slowing inflation in the world’s largest economy.
IEA Raises Demand Growth Forecasts
The IEA raised its oil demand growth forecasts for this year and the next, despite an anticipated economic growth slowdown in major economies. It increased its 2023 growth forecast to 2.4 million barrels per day (bpd) and its 2024 forecast to 930,000 bpd.
OPEC’s Positive Projections
The Organization of the Petroleum Exporting Countries (OPEC) also heightened its forecast for 2023 global oil demand growth and maintained a robust projection for 2024, reflecting a positive outlook for the market.
Impact of U.S. Inflation Data
U.S. consumer prices remained unchanged in October, contributing to a decline in the U.S. dollar against other currencies. This decrease in the dollar’s value could potentially stimulate economic activity and increase oil demand.
Developments in Oil Supplies
Exxon Mobil initiated production at a third offshore oil development project in Guyana, elevating total capacity in the South American country to approximately 620,000 bpd. Additionally, Iraq’s oil minister expressed optimism about reaching a deal to resume oil exports with the Kurdistan Regional Government in the coming days.
U.S. Oil Stockpiles and Export Halts
Energy firms in the U.S. likely withdrew 0.3 million barrels of crude from stockpiles, according to a Reuters poll of analysts. Turkey has also halted 450,000 bpd of exports through a pipeline from Iraq since March 25, following an International Chamber of Commerce arbitration ruling.
Upcoming Reports and Outlook
The American Petroleum Institute (API) trade group is set to release its oil storage report, while the U.S. Energy Information Administration (EIA) will report official data. The EIA did not release a storage report last week due to a systems upgrade.
