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Oil pares losses on tight supply but cloudy demand caps gains

Oil costs edged up on Wednesday on signs of nearterm supply tightness however stayed near their lowest in two weeks, a day after OPEC reduced its projection for global oil demand growth in 2024 and 2025.

Brent futures rose 17 cents, or 0.24%, to $72.06 a. barrel by 0420 GMT, while U.S. West Texas Intermediate (WTI). unrefined futures gained 14 cents, or 0.21%, at $68.26.

Petroleum prices edged greater as tightness in the physical. market balanced out bearish sentiment on demand. Buyers in the. physical market have actually been particularly active, with any. offered freights being grabbed quickly, ANZ experts said. in a note.

But falling demand forecasts and weak point in major. consumer China continued to weigh on market belief.

We might expect rates to consolidate around current levels. for longer, stated Yeap Jun Rong, market strategist at IG, adding. the recent effort for a bounce was rapidly sold into.

The absence of a more direct financial stimulus out of China. has actually been casting a shadow on oil demand outlook, paired with. the prospects of greater United States oil production with a Trump. presidency and looming OPEC+'s plans for an output raise, Yeap. added.

In its monthly report on Tuesday, the Company of. Petroleum Exporting Countries (OPEC) said world oil need would. rise by 1.82 million barrels per day (bpd) in 2024, below. development of 1.93 million bpd forecast last month, mostly due to. weak point in China, the world's most significant oil importer.

Oil costs settled up 0.1% on Tuesday following the news,. after falling by about 5% during the two previous sessions.

OPEC likewise cut its 2025 global demand development quote to 1.54. million bpd from 1.64 million bpd.

The International Energy Agency, which has a far lower view,. is set to release its upgraded forecast on Thursday.

The re-election of former President Trump is unlikely to. materially impact oil market fundamentals over the near term, in. our view, Barclays analysts wrote.

Drill, infant, drill: this is likely to underwhelm as a. method to drive oil prices materially lower over the near. term considered that the stock of approved authorizations in fact rose. under the Biden administration, the analysts said.

However, markets would still feel the effects of a supply. interruption from Iran or a further escalation between Iran and. Israel, according to Barclays.

Donald Trump's expected secretary of state choice, U.S. Senator Marco Rubio, is known for his hardline stance on Iran,. China and Cuba. Tighter enforcement of sanctions on Iran could. interrupt global oil supply, while a harder technique to China. might even more compromise oil need in the world's biggest customer.

2 U.S. central lenders said on Tuesday that rate of interest. are serving as a brake on inflation that is still above the 2%. mark, recommending that the Federal Reserve would be open to. more rate of interest cuts.

The Fed cut its policy rate recently by a quarter of a. percentage indicate the 4.50% -4.75% range. Rate of interest cuts. normally increase economic activity and energy need.

U.S. weekly inventory reports have actually been postponed by a day. following Monday's Veterans Day vacation. The American Petroleum. Institute industry group data is due at 4:30 p.m. EST (2130 GMT). on Wednesday.

Analysts surveyed estimated on average that crude. stocks rose by about 100,000 barrels in the week to Nov. 8.

(source: Reuters)