Crude oil prices continued their recent bounce Thursday, rising for a third straight session to settle at their best levels since late April, supported by production cuts from Saudi Arabia and Russia, a weaker U.S. dollar, and expectations for record global oil demand this year.
The International Energy Agency forecast global oil demand would hit a record high this year, although “persistent macroeconomic headwinds” caused it to trim its predicted increase.
In its latest monthly report, the IEA forecast global oil demand growth of 2.2M bbl/day in 2023 to reach total demand of 102.1M bbl/day, but that’s 220K bbl/day less than its prior estimated increase; in 2024, it projects oil demand growth slowing to 1.1M bbl/day.
“World oil demand is coming under pressure from the challenging economic environment,” the IEA said. “Demand in the OECD, and Europe in particular, is languishing amid a grinding slowdown in industrial activity.”
OPEC was more optimistic in its own separate report, forecasting global oil demand of 102M bbl/day this year, with demand growth of 2.4M bbl/day up 100K barrels from its previous monthly estimate due to higher demand from China; for 2024, it sees demand growth of 2.2M bbl/day.
WTI set a recent low of $67.05/bbl on June 28 but has been rising steadily since then, up more than 14%, with its 200-day moving average $77.34 looming ahead.
The oil and gas stock sector (NYSEARCA:XLE) ended modestly in the red, as a 1.8% decline in Exxon Mobil (XOM) following its acquisition of Denbury for $4.9B in stock, and losses in a few other names including Chevron (CVX), masked gains in most of the group.
Also in the news Thursday, production reportedly has been shut at Libya’s El Feel, Sharara and 108 oilfields in a protest against the abduction of a former finance minister.
The Sharara field, one of Libya’s largest production areas with a capacity of 300K bbl/day, has been a frequent political target; the field is run by state oil firm NOC with Spain’s Repsol (OTCQX:REPYF) (OTCQX:REPYY), France’s TotalEnergies (TTE), Austria’s OMV (OTCPK:OMVJF) and Norway’s Equinor (EQNR).
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