Oil Prices Up in Early Trade

12 Jun 2024 , 09:25 AM

Due to optimistic assessments of global demand from OPEC and the U.S. Energy Information Administration, oil prices increased somewhat on Wednesday.

U.S. West Texas Intermediate (WTI) crude futures gained 18 cents, or 0.2%, to end at $78.10, while Brent crude futures increased by 11 cents, or 0.1%, to $82.04 a barrel.

With expectations for travel and tourism in the second half, the Organisation of the Petroleum Exporting Countries (OPEC) maintained its 2024 forecast for relatively strong growth in global oil demand. Meanwhile, the EIA increased its forecast for world oil demand growth to 1.10 million barrels per day from a previous estimate of 900,000 bpd.

After OPEC and its allies said this week that they will phase out output cutbacks beginning in October, prices had decreased by more than 2%.

Market sources quoting data from the American Petroleum Institute indicate that during the week ending June 7, U.S. crude oil stockpiles decreased by 2.428 million barrels. A preliminary Reuters poll indicated that inventories were predicted to have decreased by just over a million barrels last week.

Later on Wednesday, information is anticipated from the U.S. government’s statistics division, the EIA.

Investors were also anticipating the release of the U.S. central bank’s policy statement later that day, as well as the Consumer Price Index report, which is scheduled to be released on Wednesday prior to the bell.

The U.S. monthly jobs report on Friday exceeded expectations in strength. According to the CME’s FedWatch tool, markets have reduced their expectations for the Federal Reserve’s first rate decrease in September, currently pricing in around a 50% likelihood.

Figures on the inflation of Chinese producer and consumer prices are also scheduled to be disclosed during the day.

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