- Brent crude and West Texas Intermediate crude saw slight declines, by 0.5% and 0.6%, respectively.
- The International Energy Agency revises its 2024 oil demand growth forecast downward amid slowing demand.
- US crude inventories rose unexpectedly, indicating a shift in refining operations and demand.
In the latest market developments, Oil prices Brent crude futures witnessed a slight decline, as the price of Brent crude fell by 37 cents to $81.23 per barrel, and US West Texas Intermediate (WTI) crude futures fell by 44 cents to $76.20. This decline comes on the heels of the International Energy Agency (IEA) indicating a slowdown in demand growth for the current year, which was exacerbated by an unexpected rise in US crude oil inventories, which increased by 12 million barrels to 439.5 million barrels, exceeding the expected rise.
The International Energy Agency revises demand growth forecasts for 2024 to 1.22 million barrels per day
The IEA's monthly report provides a comprehensive overview of global oil demand. It slightly revised its growth forecast for 2024 from 1.24 million barrels per day to 1.22 million barrels per day. This change indicates a decline in optimism about oil demand growth. On the supply side, the agency updated its forecasts. It now expects an increase of 1.7 million barrels per day this year, up from the previous estimate of 1.5 million barrels per day. This adjustment, along with the significant decline in refining activity to its lowest level since December 2022, underscores the complex interplay between supply and demand in the oil market.
US crude inventories rise amid fears of a global recession
Economic indicators, including recession trends in Britain and Japan, further influenced market sentiment. Both countries have seen a contraction in GDP, with the British economy shrinking by 0.3% in the last quarter of 2023, indicating a recession, and the Japanese economy is facing a decline as well, complicating the global economic outlook and its impact on oil demand and pricing.
Alongside these broader economic changes, the oil market has seen unexpected shifts in inventory data. Despite the overall increase in crude oil supplies, reductions in gasoline and distillate inventories were larger than expected, providing a complex view of the current state of the oil market. As analysts and policymakers navigate these changing dynamics, external economic factors continue to influence the direction of the oil market.
