Oil Prices Surge Amid OPEC's Bullish Demand Outlook and U.S. Production Interruptions

18 Jan 2024 , 10:14 AM

Due to OPEC’s prediction of reasonably strong increase in global oil demand over the next two years and a cold snap that interrupted some oil output in the United States, oil prices moved higher on Thursday.

U.S. West Texas Intermediate (WTI) crude futures increased 34 cents to $72.90, while Brent crude futures climbed 28 cents to $78.16 a barrel.

According to OPEC’s monthly report, global oil demand is expected to increase significantly by 1.85 million barrels per day (bpd) to 106.21 million bpd in 2025. According to OPEC’s December prediction, demand growth for 2024 would be 2.25 million barrels per day.

Meanwhile, below-freezing weather in North Dakota, the nation’s largest oil-producing state, led oil output to drop by 650,000 to 700,000 barrels per day, or less than half of normal, according to the state.

Data on oil inventories from the US government is anticipated later on Thursday. Based on data from the American Petroleum Institute released on Wednesday, market sources reported that domestic oil stockpiles increased by 480,000 barrels last week.

Despite tensions in the Middle East, the International Energy Agency (IEA) anticipates that oil markets will be in a ‘comfortable and balanced position’ this year due to increased production and a slowing projection for demand growth, as its executive director, Fatih Birol, stated at the Reuters Global Markets Forum on Wednesday.

Due to Houthi attacks on ships in the Red Sea, numerous corporations were compelled to reroute their cargo around Africa, resulting in longer and more expensive journeys. In retaliation for the attacks on shipping, the United States launched more strikes against Houthi targets in Yemen on Wednesday.

The Houthis, who support Iran, claim that they are supporting the Palestinian people in Israel’s ongoing conflict with Gaza.

For feedback and suggestions, write to us at [e-mail]