Brent and WTI crude futures decline as Opec forecasts strong growth in global oil demand
19 January 2024 - 07:31
byYuka Obayashi
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Tokyo — Oil prices drifted lower on Friday after a rally the day before, as geopolitical tensions and disruptions in US oil production from a cold blast were countered by concerns over slow demand growth in China.
Brent crude futures fell 17c, or 0.2%, to $78.93 a barrel by 1.51am GMT, and US West Texas Intermediate crude futures (WTI) slid 3c to $74.05.
Both benchmarks, which gained about 2% on Thursday as the International Energy Agency (IEA) joined producer group Opec in forecasting strong growth in global oil demand, are on track to end the week about 1%-2% higher.
Pakistan launched strikes on separatist militants inside Iran on Thursday, in a retaliatory attack two days after Tehran said it struck the bases of another group within Pakistani territory.
“As tensions in the Middle East are spreading, traders don’t want to take short positions, but they are also cautious about continuing to build long positions as China’s economic recovery remains slow,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
There are also worries that the US-China conflict could attract attention again as the US election approaches, which would be negative for energy demand, he said.
“Unless tensions in the Middle East quickly escalate further, WTI is likely to continue trading in a range around $70-$76,” he said.
Two oil tankers that had diverted away from the Red Sea have turned back and passed through the Bab al-Mandab Strait, ship-tracking data showed, though tensions in the region continued to disrupt global shipping and trade.
The US Energy Information Administration on Thursday reported a larger-than-expected draw in crude inventories of 2.5-million barrels on strong demand from refineries in the week ended January 12, but petrol and distillate inventories rose to multiyear highs.
Meanwhile, about 40% of oil output in North Dakota, a top oil-producing US state, remained shut-in due to extreme cold weather and operational challenges, the state’s pipeline authority said on Wednesday.
On Thursday, the IEA again raised its 2024 global oil demand growth forecast, though its projection remains lower than Opec’s expectations, and said the market looked well supplied because of strong growth outside the producer group.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil prices fall on China demand concerns
Brent and WTI crude futures decline as Opec forecasts strong growth in global oil demand
Tokyo — Oil prices drifted lower on Friday after a rally the day before, as geopolitical tensions and disruptions in US oil production from a cold blast were countered by concerns over slow demand growth in China.
Brent crude futures fell 17c, or 0.2%, to $78.93 a barrel by 1.51am GMT, and US West Texas Intermediate crude futures (WTI) slid 3c to $74.05.
Both benchmarks, which gained about 2% on Thursday as the International Energy Agency (IEA) joined producer group Opec in forecasting strong growth in global oil demand, are on track to end the week about 1%-2% higher.
Pakistan launched strikes on separatist militants inside Iran on Thursday, in a retaliatory attack two days after Tehran said it struck the bases of another group within Pakistani territory.
“As tensions in the Middle East are spreading, traders don’t want to take short positions, but they are also cautious about continuing to build long positions as China’s economic recovery remains slow,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
There are also worries that the US-China conflict could attract attention again as the US election approaches, which would be negative for energy demand, he said.
“Unless tensions in the Middle East quickly escalate further, WTI is likely to continue trading in a range around $70-$76,” he said.
Two oil tankers that had diverted away from the Red Sea have turned back and passed through the Bab al-Mandab Strait, ship-tracking data showed, though tensions in the region continued to disrupt global shipping and trade.
The US Energy Information Administration on Thursday reported a larger-than-expected draw in crude inventories of 2.5-million barrels on strong demand from refineries in the week ended January 12, but petrol and distillate inventories rose to multiyear highs.
Meanwhile, about 40% of oil output in North Dakota, a top oil-producing US state, remained shut-in due to extreme cold weather and operational challenges, the state’s pipeline authority said on Wednesday.
On Thursday, the IEA again raised its 2024 global oil demand growth forecast, though its projection remains lower than Opec’s expectations, and said the market looked well supplied because of strong growth outside the producer group.
Reuters
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