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Oil Climbs on Optimistic Demand Outlook

Oil prices rose on Wednesday, driven by positive global demand forecasts from the U.S. Energy Information Administration (EIA) and the Organization of the Petroleum Exporting Countries (OPEC). This was further supported by industry data indicating a larger-than-expected drop in U.S. crude oil inventories.


Key Developments:

Price Movements:

Brent Crude Futures: Increased by 50 cents, or 0.6%, reaching $82.42 a barrel at 0630 GMT.


U.S. West Texas Intermediate (WTI) Crude Futures: Rose by 62 cents, or 0.8%, to $78.52 a barrel.


Demand Forecasts:

EIA Forecast: The EIA raised its 2024 world oil demand growth forecast to 1.10 million barrels per day (bpd) from the previous estimate of 900,000 bpd.

OPEC Forecast: OPEC maintained its 2024 forecast, anticipating strong global oil demand growth, driven by expectations for increased travel and tourism in the latter half of the year.

Market Reactions:

Analyst Insights: Analysts from ANZ noted that despite OPEC’s announcement to phase out some output cuts starting October, the maintained demand forecasts suggest that these adjustments should be well-absorbed by the market.

U.S. Crude Inventories:

API Data: U.S. crude oil stocks fell by 2.428 million barrels in the week ending June 7, exceeding analysts’ expectations.

EIA Data: Official data from the EIA was anticipated later on Wednesday.

Upcoming Economic Indicators:

U.S. CPI Report: Investors awaited the U.S. Consumer Price Index report, which would be released before the market opens on Wednesday.

Fed Policy Announcement: The U.S. central bank’s policy announcement was also due later in the day.

Analyst Perspectives:

Tina Teng, Independent Market Analyst: Teng suggested that expectations of a dovish stance from the Federal Reserve could support the upward momentum of oil prices, as it would likely stimulate economic growth and boost oil demand. However, she cautioned that a global economic slowdown could still pose a long-term bearish risk.

Global Context:

China’s Economic Indicators:

Consumer Inflation: Held steady in May.

Producer Price Declines: Eased, indicating a need for Beijing to bolster domestic demand and address the uneven economic recovery.


The recent rally in oil prices is underpinned by optimistic demand outlooks from major economic bodies and a significant reduction in U.S. crude inventories. While the market is buoyed by these short-term positive signals, concerns about the global economic slowdown and its potential impact on long-term oil demand remain.

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