Oil prices remained relatively stable on Tuesday, with both Brent crude and West Texas Intermediate (WTI) futures trading slightly lower, as OPEC maintained its global oil demand forecasts for 2024 and 2025. Investors are now eagerly awaiting the release of U.S. inflation data later this week, which could provide clues about the Federal Reserve’s future interest rate decisions and their potential impact on economic growth and oil demand.
In its latest monthly report, OPEC stated that it expects world oil demand to rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025, figures that remain unchanged from its previous forecast. The organization also expressed cautious optimism about the potential for the global economy to outperform expectations this year, despite acknowledging certain downside risks.
The oil market has been monitoring the progress of wildfires in remote western Canada, which could potentially disrupt the country’s oil supply. Analysts at Goldman Sachs have noted that the spreading wildfires in Alberta’s oil sands region pose downside risks to Canada’s oil production outlook, as a similar event in the past led to a temporary shutdown of over 1 million bpd of output. However, no operational disruptions have been reported so far.
Despite the various factors at play, the oil market is currently in a “broad holding pattern,” as investors await the release of the U.S. Consumer Price Index data on Wednesday, which could provide crucial insights into the Federal Reserve’s future monetary policy decisions and their potential impact on economic growth and oil demand.