NEW YORK: Oil prices rose slightly on Tuesday as the market weighed bearish US economic data against OPEC’s demand growth forecast and persistent geopolitical tensions.
Brent futures for May delivery rose by 21 cents to $82.42 a barrel at 11:50 a.m. EDT (1550 GMT). The April US West Texas Intermediate (WTI) crude contract rose 31 cents to $78.24.
US consumer prices increased solidly in February amid higher costs for gasoline and shelter, the Labour Department’s Bureau of Labour Statistics said on Tuesday, a sign of persistent inflation. “This does show a second month of an increase,” said Tim Snyder, an economist at Matador Economics, noting that the numbers were still within expectations. “Consensus in the markets says the Fed will not move to lower rates until June,” he added.
On Tuesday, OPEC stuck to its forecast for relatively strong growth in global oil demand in 2024 and 2025, and further raised its economic growth forecast for this year saying there was more room for improvement.
The monthly report from the US Energy Information Administration (EIA) is expected later on Tuesday, while the International Energy Agency (IEA), which advises industrialised nations, is anticipated to put out its estimates on Thursday.
Last week, economic data from China, the world’s biggest oil buyer, suggested softening demand even as crude imports increased in the first two months of the year compared with the same period in 2023. “Bearish demand sentiment and growing non-OPEC supply leave little room for the market to be bullish on oil prices at this time,” said Serena Huang, head of APAC analysis at Vortexa.
Hopes of a ceasefire in Israel’s war against Hamas have faded, with negotiations deadlocked in Cairo while the conflict threatens to widen as Israel and Lebanon’s Hezbollah continue to exchange fire. Though the Gaza conflict has not led to significant oil supply disruptions, Yemen’s Iran-aligned Houthis have been attacking ships in the Red Sea and Gulf of Aden since November in a campaign they say is in solidarity with Palestinians.