ISLAMABAD
Crude oil prices inched lower on Wednesday following earlier gains on cooling US inflation and the International Energy Agency (IEA) revising up its oil demand estimates.
As of 1145 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $0.50 (-0.61 percent) to reach $81.97 a barrel. The West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $0.57 (-0.73 percent) to $77.69 a barrel.
However, the price of Russian Sokol increased by $0.32 (+0.42 percent) to $77.14. Arab Light prices witnessed an increase of $0.34 (+0.39 percent) to reach $87.19 a barrel. On the other hand, the price for Opec Basket increased to $84.08 a barrel with an increase of $0.86 (+1.03 percent). The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
Official US oil inventory data is due later in the day, but industry data released late on Tuesday pointed to a weekly build in inventories. Meanwhile, China’s industrial output grew 4.6 percent in October compared with the same period a year earlier, while retail sales rose 7.6 percent on year-on-year.
The IEA has raised its oil demand growth forecast for this year and the next on record demand in China and “resilient” US crude deliveries. The Paris-based agency expects global crude demand to rise by 2.4 million barrels per day in 2023, up from its previous forecast of 2.3 million bpd growth.
Oil demand in 2024 is now projected to grow by 930,000 bpd, up from the IEA’s previous estimate of 900,000 bpd, the agency said in its monthly oil market report on Tuesday. “For now, with demand still exceeding available supplies heading into the northern hemisphere winter, market balances will remain vulnerable to heightened economic and geopolitical risks and further volatility ahead,” the agency said.
“Fears that the war between Israel and Hamas would escalate into a wider regional conflict, disrupting oil supply flows, have yet to materialise.”
In the Organization for Economic Cooperation and Development (OECD) countries, economic headwinds are “increasingly apparent”, with this year’s slim demand gains giving way to a contraction in 2024, the IEA said. Saudi Arabia and Rusia’s voluntary output cuts of a combined 1.3 million bpd will keep the oil market in a “significant” deficit through year-end, with the Opec+ alliance pumping 900,000 bpd below the demand for its crude, the agency said.
