By Adedapo Adesanya
Prices of the crude oil grades rebounded on Wednesday after the market weighed the reduced demand growth forecast of the Organisation of the Petroleum Exporting Countries (OPEC).
Brent crude futures gained 39 cents or 0.5 per cent to $72.28 a barrel and the US West Texas Intermediate crude (WTI) futures went up by 31 cents or 0.5 per cent to $68.43 per barrel.
OPEC lowered its global oil demand growth forecasts for 2024 and 2025, citing weak demand in China, India, and other regions.
Market analysts noted that the bearish data scared investors especially as US and global oil production are set to rise to slightly larger record highs this year than prior forecasts.
OPEC said world oil demand would rise by 1.82 million barrels per day in 2024, down from growth of 1.93 million barrels per day forecast last month.
It was the producer group’s fourth straight downward revision for 2024 as until August, OPEC had kept the outlook unchanged since its first forecast in July 2023.
In the report, OPEC also cut its 2025 global demand growth estimate to 1.54 million barrels per day from 1.64 million barrels per day.
The International Energy Agency (IEA) is set to publish its updated estimate on Thursday. The Paris-based agency has a much lower demand growth forecast than OPEC.
Meanwhile, the Trump factor continues to impact prices, a week since he won the US Presidential elections.
He selected Mr Marco Rubio as his secretary of state, a move that market analysts say could be bullish for prices. His view on Iran could see sanctions enforced, potentially removing 1.3 million barrels per day from global supply.
There are also expectations that Israel could have to strike Iran’s oil facilities if the war continues to rage on.
Reuters reported that Iran has made plans to sustain oil production and exports ahead of the possible oil curbs by the US.
Limiting oil price gains, the US Dollar rose yet again after data showed US inflation for October increased in line with expectations, suggesting the Federal Reserve will keep cutting rates.
A stronger greenback makes dollar-denominated oil more expensive for holders of other currencies, which can reduce demand.
Crude oil inventories in the US fell by 777,000 barrels for the week ending November 1, according to the American Petroleum Institute (API). For the week prior, the API reported a 3.132-million barrel build in crude inventories.
Official data from the US Energy Information Administration (EIA) will be released later on Thursday, due to delay’s caused by a US holiday on Monday.