NEW YORK: Oil prices rose about 1% to a one-week high after the International Energy Agency (IEA) boosted its demand growth forecasts and the US dollar fell on data showing inflation was slowing in the world’s biggest economy.
Brent futures rose $1.01, or 1.2%, to $83.53 a barrel by 11:33 a.m. EST (1633 GMT). US West Texas Intermediate (WTI) crude rose $1.00, or 1.3%, to $79.26.
The IEA raised its oil demand growth forecasts for this year and next despite an expected slowdown in economic growth in nearly all major economies. The agency lifted its 2023 growth forecast to 2.4 million barrels per day (bpd) from 2.3 million bpd. For 2024, it raised the forecast to 930,000 bpd from 880,000 bpd.
That IEA forecast came a day after the Organization of the Petroleum Exporting Countries (OPEC) boosted its forecast for 2023 global oil demand growth and stuck to its relatively high projection for 2024. “The central bank of the oil market sees a sturdy economy resulting in strong demand, not just for its oil but globally, too,” PVM Oil analyst Tamas Varga said of OPEC’s findings.
US consumer prices were unchanged in October as Americans paid less for gasoline, and the annual increase in underlying inflation was the smallest in two years. Traders bet the Federal Reserve could start cutting interest rates by May, which could boost economic activity and oil demand, which sent the US dollar down to a two-month low against a basket of other currencies. A weaker dollar can boost oil demand by making crude cheaper for buyers using other currencies.
Exxon Mobil started production at a third offshore oil development project in Guyana, lifting total capacity in the South American country to about 620,000 bpd.
Iraq’s oil minister said he was optimistic a deal to resume oil exports can be reached with the Kurdistan Regional Government (KRG) in the coming days.
Turkey has halted 450,000 bpd of exports through a pipeline from Iraq since March 25 after an International Chamber of Commerce arbitration ruling. In the US, energy firms likely pulled 0.3 million barrels of crude from US stockpiles during the week ended Nov. 10, according to a Reuters poll of analysts.