Oil prices rose slightly on Wednesday on signs of short-term supply shortages, but remained near a two-week low, a day after OPEC cut its oil prices. global oil demand growth forecast for 2024 and 2025.
Brent futures rose 13 cents, or 0.18 percent, to $72.02 a barrel by 0205 GMT, and U.S. West Texas Intermediate (WTI) crude futures gained 13 cents, or 0.19 %, at $68.25.
“Crude oil prices rose slightly as tensions in the physical market offset bearish sentiment on demand. Buyers in the physical market were particularly active, with all available cargoes quickly sold out,” analysts said from ANZ in a note.
But lower demand projections and weakness in major consumer China continued to weigh on market sentiment.
In its monthly report on Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) said global oil demand would increase by 1.82 million barrels per day (bpd) in 2024, down from growth in 1.93 million bpd forecast last month, mainly due to weakness in China, the world's largest oil importer.
Oil prices rose 0.1% on Tuesday following the news, after falling around 5% in the previous two sessions.
OPEC also reduced its estimate for global demand growth in 2025 from 1.64 million bpd to 1.54 million bpd.
The IEA, which has a much lower view, is expected to release its updated forecast on Thursday.
“The re-election of former President Trump is unlikely to materially affect oil market fundamentals in the near term, in our view,” Barclays analysts wrote.
“Drill, baby, drill: This strategy is likely not enough to materially lower oil prices in the near term,” given that the stock of approved permits has actually increased under the Biden administration, the analysts said. analysts.
However, markets would still feel the effects of an interruption of supplies from Iran or a further escalation between Iran and Israel, according to Barclays.
Senator Marco Rubio, who is expected to be Donald Trump's choice for secretary of state, is known for his uncompromising stance on Iran, China and Cuba. Tougher enforcement of sanctions on Iran could disrupt global oil supplies, while a tougher approach to China could further weaken oil demand in the world's biggest consumer.
Two U.S. central bankers said Tuesday that interest rates are holding back inflation, which remains above 2%, suggesting the Federal Reserve would be open to further interest rate cuts.
Last week, the Fed cut its benchmark rate by a quarter of a percentage point to the range of 4.50% to 4.75%. Interest rate reductions generally stimulate economic activity and energy demand.
Weekly reports on U.S. stocks were delayed a day due to the Veterans Day holiday. Data from the American Petroleum Institute industry group is due at 4:30 p.m. EST (2130 GMT) Wednesday.
Analysts polled by Reuters estimated on average that crude inventories rose by about 100,000 barrels in the week of Nov. 8.
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