Oil prices stabilized on Wednesday after falling more than $1 at the start of the session following signs of rising demand in the International Energy Agency’s (IEA) report.
Brent crude futures rose 8 cents, or 0.09%, to $93.25 a barrel as of 0933 GMT. West Texas Intermediate (WTI) crude was up 4 cents, or 0.05%, at $87.35 a barrel.
The IEA expects large-scale gas-to-oil shifts estimated at an average of 700,000 barrels per day (bpd) from October 2022 to March 2023.
These data follow the Organization of the Petroleum Exporting Countries’ forecasts for growth in global oil demand in 2022 and 2023 and refer to signs that major economies are doing better than expected despite challenges such as rising inflation.
Global observed inventories fell by 25.6 million barrels in July, according to the IEA. The IEA expects global oil demand growth to stall in the fourth quarter of this year as the economic slowdown deepens.
Analysts had suggested that OPEC’s uptrend could be wishful thinking. It is rumored that OPEC continues to view the global economy through pink glasses, despite the threat of recession in several key economies.
A warmer-than-expected US inflation report on Tuesday thwarted hopes the Fed could ease its rate tightening in the coming months. Fed officials will meet next Tuesday and Wednesday as inflation stays well above the US central bank’s 2% target.
Price pressure continued to follow tough ongoing COVID-19 curbs in China which are squeezing fuel demand at the world’s largest oil importer.
On the supply side, US crude inventories increased by nearly 6 million barrels in the week ended Sept. 9, according to market sources based on Wednesday’s figures from the American Petroleum Institute (API).
The US government will release inventory data at 1430 GMT on Wednesday.
