Oil prices rose on Wednesday on expectations of strong global demand, including from the United States, the world’s largest consumer. Even sticky U.S. inflation hasn’t significantly changed expectations that the Fed might start cutting interest rates soon.
Brent futures for May delivery were up 46 cents, or 0.6%, at $82.38 a barrel by 04:00 GMT. The April WTI crude oil contract rose 47 cents, or 0.6%, to $78.03.
The Organization of Petroleum Exporting Countries has stuck to its forecast for strong growth in global oil demand of 2.25 million barrels per day (bpd) in 2024 and 1.85 million bpd in 2025 and raised its economic growth forecast for this year.
US crude oil stocks and fuel inventories fell last week, a sign that demand is healthy, according to figures from the American Petroleum Institute (API).
Analysts believe the Fed could begin cutting interest rates in the summer, even though U.S. consumer prices rose strongly in February due to increases in gasoline and housing costs. Low rates support oil demand.
The risk environment largely continues. However, there is a strong belief that current market pricing for a rate cut in June will work. The unexpected decline in US crude oil stocks and OPEC’s strong growth forecasts also support prices.
Oil prices were under pressure in the previous session after the US Energy Information Administration (EIA) raised its domestic oil production forecasts; However, the declines were limited due to expectations that OPEC+’s production cuts would slow global oil growth and the recent wave of drone attacks, especially on Russian refineries.
