Oil prices see increase due to optimistic demand projections
Date
7/24/2024 9:47:01 AM
(MENAFN) On Wednesday, oil rates saw an increase due to optimistic demand projections and recent data indicating a reduction in crude inventories in the United States, which is the world's largest oil consumer. As of 10:13 AM local time (07:13 GMT), the international benchmark brent crude was trading at USD81.31 per barrel, marking a 0.37 percent rise from its previous closing price of USD81.01 per barrel. Similarly, the American benchmark West Texas Intermediate (WTI) saw a 0.39 percent increase, trading at USD77.26 per barrel compared to USD76.96 per barrel in the previous session.
This price uptick followed data released by the American Petroleum Institute (API) late Tuesday, which revealed a decrease of 3.9 million barrels in US crude oil inventories. This figure exceeded market expectations, which had predicted a decrease of 2.47 million barrels. The official figures from the Energy Information Administration (EIA) are anticipated later in the day, and if they confirm a reduction in crude oil inventories, it is likely that prices will continue to rise.
Additionally, supply concerns due to wildfires in Alberta, Canada, have further supported the increase in oil rates. These wildfires are threatening more than 10 percent of the region's oil production, according to Daniel Hynes, a commodity strategist at the Australia and New Zealand Banking Group. He noted that companies such as Suncor Energy and Altair Energy have been compelled to reduce output as the wildfires have affected their facilities.
Despite these bullish factors, oil rates are also being pressured by slower-than-expected economic growth in China, the largest importer of crude oil. Recent figures have raised concerns about China's crude oil demand, contributing to downward pressure on prices. Additionally, cease-fire efforts in the Middle East, a region that holds a significant portion of the world's oil reserves, have eased supply concerns and contributed to the overall moderation in oil rates.
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