Oil prices were up about 1% on Wednesday having pared gains after producers group OPEC cut its forecasts for demand growth in 2024 and 2025.
OPEC in its monthly reports has lowered its outlook five consecutive times.
Brent crude futures were up 74 cents, or 1.03%, to $72.93 a barrel by 1310 GMT. U.S. West Texas Intermediate crude futures rose 76 cents, or 1.1%, to $69.35.
“The (OPEC) Secretariat’s estimates continued to play catch up with consensus with further downward revisions implemented in the demand forecasts, reducing year-over-year growth in 2024 and 2025,” said Harry Tchilinguirian, head of research at Onyx Capital Group.
OPEC+, which groups members of the Organization of the Petroleum Exporting Countries with other producers such as Russia, earlier this month delayed plans to start raising output.
Oil prices climb
Weak demand, particularly in China, and non-OPEC+ supply growth were two factors behind the move.
Yet UBS analyst Giovanni Staunovo noted: “With demand growth outpacing non-OPEC+ supply growth, the group still anticipates a tightening of the oil market next year.”
Brent rose as much as 1.42% to $73.22 earlier in the session, while WTI jumped as much as 1.5% to $69.62, as market participants anticipated a rise in demand from top importer China following Beijing’s latest plans to boost economic growth.
China said on Monday it would adopt an “appropriately loose” monetary policy in 2025 marking the first easing of its stance in 14 years.
“While past efforts have focused on sectors like electric vehicles and infrastructure, there are expectations that China may shift toward policies to boost consumer spending…this has sparked optimism in the oil market,” said Li Xing Gan, financial markets strategist consultant to Exness.
Chinese crude imports also grew annually for the first time in seven months in November, up more than 14% from a year earlier.
Meanwhile the Kremlin said that reports of a possible tightening of U.S. sanctions on Russian oil suggested the administration of U.S. President Joe Biden wants to leave a difficult legacy for U.S.-Russia relations.
Bloomberg News reported on Tuesday that the U.S. government was weighing harsher sanctions against Russia’s lucrative oil trade, seeking to tighten the squeeze on the Kremlin’s war machine just weeks before Donald Trump returns to the White House.
In the U.S., crude oil and fuel stocks rose last week, market sources said on Tuesday, citing American Petroleum Institute figures on Tuesday.
Crude stocks rose by 499,000 barrels in the week ended on Dec. 6, the sources said on condition of anonymity. Gasoline inventories rose by 2.85 million barrels and distillate stocks rose by 2.45 million, they said.
Official data on oil stocks is due from the U.S. Energy Information Administration (EIA) on Wednesday at 10:30 a.m. ET (1530 GMT). Analysts polled by Reuters expect a 900,000-barrel decline in crude and a 1.7 million-barrel increase in gasoline.
Source: Brecorder
