Oil prices rose slightly on Tuesday on expectations for healthy market fundamentals, following an OPEC report saying demand remains strong and concerns that supply could be disrupted as the United States restricts Russian oil exports.
Brent crude futures were up 23 cents, or 0.28%, at $82.75 a barrel by 0722 GMT. West Texas Intermediate (WTI) crude oil futures rose 21 cents, or 0.27%, to $78.47 a barrel.
After the intense sales in the market over the last three weeks, oil managed to find some support. Although the fundamental indicators are not as positive as initially thought, they are supportive as the market is likely to run a deficit. The glut expected early next year could be erased even if the Saudis lift further voluntary supply cuts.
In its monthly report, the Organization of Petroleum Exporting Countries (OPEC) blamed speculators for the recent decline in prices. It also slightly raised its 2023 forecast for global oil demand growth and stuck to its relatively higher 2024 forecast.
Last week, oil prices fell to their lowest level since July due to concerns that demand may decrease in the US and China, the largest oil consumers. Consumer prices in China fell in October to levels not seen since the COVID-19 outbreak, and exports for the long month contracted more than forecast.
The U.S. Department of Energy plans to buy 1.2 million barrels of oil to help replenish reserves after the largest-ever draw from the Strategic Petroleum Reserves last year, it may boost demand.
U.S. pressure on Russian oil exports could potentially disrupt supply and further support prices.
The US Treasury Department has sent notices to ship management companies to seek information about 100 ships it suspects are violating Western sanctions on Russian oil. This is Washington’s biggest step since Moscow imposed a price ceiling to restrict oil revenues.
Some analysts say ongoing talks in Iraq to increase crude oil supplies could put pressure on fundamentals.
Turkey has halted 450,000 barrels per day (bpd) of exports to the north via the Iraq-Turkiye pipeline since March 25, following an arbitration decision by the International Chamber of Commerce. Iraq’s oil minister expects to reach an agreement on resuming oil exports from the north via the Iraq-Turkey pipeline.
The market is focused on the International Energy Agency’s (IEA) latest monthly oil market report to be released later in the day.
US inflation data will also be published on Tuesday, while US producer price index data will be published on Wednesday.
Meanwhile, it is said that some factors may also support oil prices, such as whether the APEC summit will improve Sino-US relations and whether China will further reduce interest rates to support the economy.