Oil prices remained steady near two-week lows on Wednesday, with markets cautiously eyeing global demand and recent OPEC projections. OPEC reduced its growth forecasts for oil demand in 2024 and 2025, attributing the adjustment to economic concerns in China and other key regions. By mid-morning, Brent crude had risen 49 cents to $72.38 per barrel, while U.S. West Texas Intermediate crude climbed 48 cents, reaching $68.60. Analysts from ANZ noted that tight supply helped stabilise prices, with strong buyer activity absorbing any available cargoes quickly.
OPEC’s revised outlook, its fourth consecutive downgrade for 2024, points to demand challenges in China, India, and beyond. Despite these concerns, prices experienced a modest uptick of 0.1% on Tuesday, following two days of more substantial declines. Additional supply disruptions could still emerge from Iran or heightened tensions involving Iran and Israel, Barclays analysts suggested.
In the U.S., potential policy shifts may also impact oil prices. Senator Marco Rubio, seen as a likely choice for Secretary of State, advocates a tough approach on Iran, China, and Cuba. According to Ashley Kelty from Panmure Liberum, a hardline stance could lead to increased sanctions on Iran, potentially reducing global oil supply by 1.3 million barrels per day.
Iran, meanwhile, has outlined strategies to maintain its oil output and exports amid anticipated U.S. pressures, Shana, the country’s oil ministry news site, reported. Market watchers were also awaiting the latest American Petroleum Institute data, with analysts predicting a small increase in U.S. crude stockpiles for the week ending November 8.
In Closing
The oil market faces a mix of bullish and bearish factors, balancing tight physical supplies with concerns over global demand, particularly from China. With geopolitical influences and market expectations shaping the outlook, the coming months may see continued price adjustments.
Union Jack Oil plc (LON:UJO) is an oil and gas company with a focus on onshore production, development, exploration and investment opportunities within the United Kingdom and the United States of America hydrocarbon sector.
