Oil futures rose early Tuesday, on track for a fourth straight rise after the International Energy Agency raised its outlook for 2024 growth in oil demand.
Crude had tumbled last week to its lowest since mid-July as fears of a broader conflict in the Middle East faded and worries grew over the outlook for global crude demand.
Price action
-
West Texas Intermediate crude
CL00,
+0.98%
for December delivery
CL.1,
+0.98% CLZ23,
+0.98%
rose 26 cents, or 0.3%, to $78.52 a barrel on the New York Mercantile Exchange. -
January Brent crude
BRN00,
+0.87% BRNF24,
+0.87% ,
the global benchmark, was up 23 cents, or 0.3%, at $82.75 a barrel on ICE Futures Europe.
Market drivers
The Paris-based International Energy Agency on Tuesday raised its forecast for growth in demand this year by 100,000 barrels a day to 2.4 million barrels a day, which would take total demand to an average of 102 million barrels a day.
The IEA, however, expects demand and supply to temper next year, as the effects of slower global growth and high interest rates take hold.
Supply overall is expected to rise by 1.6 million barrels a day, taking average supply to 103.4 million barrels a day. Meanwhile, demand in 2024 is expected to rise by 930,000 barrels a day, taking average demand to 102.9 million barrels a day, leading to a small surplus.
Oil had been due for a bounce after an “extreme” selloff that last week took WTI and Brent to their lowest levels since mid-July, Warren Patterson and Ewa Manthey, commodity analysts at ING, said in a Friday note.
“While fundamentals may not be as bullish as initially thought, they are still supportive, with the market likely to be in deficit for the remainder of this year,” they wrote. “The surplus we see early next year could even be erased if the Saudis roll over their additional voluntary supply cuts.”
Saudi Arabia in July implemented a cut of 1 million barrels a day that it has extended through the end of the year The reduction was on top of existing cuts by OPEC+, which is made up of the Organization of the Petroleum Exporting Countries and its allies. A Nov. 26 OPEC+ meeting will be watched to see if cuts are extended into 2024.
OPEC on Monday, in its monthly report, raised its 2023 estimate for demand growth by 100,000 barrels a day to 2.5 million barrels a day and left its forecast for growth in demand next year at 2.2 million barrels a day. OPEC said market fundamentals remain tight and dismissed the fall in prices since late September as the fault of speculators.
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