OPEC Maintains Demand Forecasts, Lifting Oil Prices Slightly

(CTN News) – A combination of bearish economic data from the United States and OPEC’s cautious forecast of demand growth led to a slight increase in oil prices on Tuesday.

A futures contract for Brent crude oil for May delivery increased by 21 cents to $82.42 per barrel at 11:50 a.m. (Eastern Daylight Time). U.S. West Texas Intermediate (WTI) crude prices increased 31 cents to $78.24 in April.

According to the Bureau of Labor Statistics of the Labor Department, consumer OPEC prices in the United States increased solidly in February amid higher costs for gasoline and shelter.

“These numbers show a second consecutive month of growth,” said Tim Snyder, an economist at Matador Economics. According to the market consensus, the Federal Reserve will not lower interest rates until June.

In a statement issued on Tuesday, OPEC reiterated its forecast for fairly strong growth in global oil demand in 2024 and 2025, as well as raising its economic growth forecast for this year, indicating that there is still considerable room for improvement.

Earlier this week, the Energy Information Administration (EIA) will publish its estimates on Tuesday, while the International Energy Agency (IEA), which advises industrialized nations, will publish its estimates on Thursday.

China, the world’s largest oil buyer, reported last week that economic data indicated a softening in demand even as crude imports increased in the first two months of this year.

A bearish sentiment regarding demand and a growing non-OPEC supply make it difficult for the market to be bullish about oil prices at the moment, according to Serena Huang, head of APAC analysis for Vortexa.

Tensions between countries on the international scene

The prospects of a ceasefire in Israel’s war against Hamas have diminished, with negotiations deadlocked in Cairo, while the conflict threatens to widen due to the exchange of fire between Israel and Lebanon’s Hezbollah.

While the OPEC Gaza conflict has not disrupted oil supplies, Yemen’s Iran-aligned Houthis have been attacking ships in the Red Sea and Gulf of Aden in a campaign they claim is in solidarity with Palestinians.

OPEC missiles were fired by the Houthis on Tuesday at what they claimed was an American ship in the Red Sea.

According to John Evans, CEO of oil broker PVM, traders have become accustomed to such attacks.

According to him, the inventory of oil that might be affected is not lost, only delayed – and because the new shipping times will eventually become the norm, it will no longer be applicable to the stock of oil that may be affected,” he added.

During a Ukrainian attack on energy facilities, Lukoil’s NORSI refinery in Russia was set ablaze.

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