Oil prices rise on robust global demand outlook

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SINGAPORE — Oil prices edged higher in early trading on Monday as OPEC stuck to forecasts of robust growth in global fuel demand, offsetting fears of another interest rate hike from the US Federal Reserve next week after the unexpected rise in consumer prices in August.

Brent crude futures rose 3 cents to $93.20 a barrel at 01:16 GMT, after falling 0.9% on Tuesday. U.S. West Texas Intermediate crude was at $87.41 a barrel, up 10 cents, or 0.1%.

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The Organization of the Petroleum Exporting Countries (OPEC) on Tuesday reiterated its forecast for global oil demand growth in 2022 and 2023, citing signs that major economies are doing better than expected despite headwinds such as the surge. of inflation.

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Oil demand will increase by 3.1 million barrels per day (bpd) in 2022 and 2.7 million bpd in 2023, OPEC said in a monthly report, leaving its forecast unchanged from last month.

“The resilient movements in oil prices suggest that insufficient supply is still a major issue in physical markets, especially after OPEC maintained its positive demand outlook on Tuesday,” said CMC Markets analyst Tina Teng. .

Oil prices were also supported by reports that the US Biden administration was considering filling its strategic oil reserve, as well as lower market expectations for a relaunch of the 2015 nuclear deal between the West and the West. and Iran, analysts at ANZ Research said in a note.

A warmer-than-expected U.S. inflation report on Tuesday, however, weighed on oil and financial markets, dashing hopes that the Fed could ease rate-tightening in the coming months.

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Fed officials are due to meet next Tuesday and Wednesday as inflation remains well above the US central bank’s 2% target.

In China, ongoing tough COVID-19 restrictions are squeezing fuel demand from the world’s largest oil importer.

« China’s zero COVID policy remains intact and this will limit any rebound that emerges over the coming weeks, » Edward Moya, senior market analyst at OANDA, said in a note.

« The U.S. is the big wild card and if that demand outlook weakens, oil could resume its downward trajectory in place since the start of the summer. »

On the supply side, U.S. crude inventories rose about 6 million barrels for the week ended September 9, according to market sources citing figures from the American Petroleum Institute on Wednesday.

The U.S. government will release inventory data at 10:30 a.m. EDT (2:30 p.m. GMT) on Wednesday. (Reporting by Isabel Kua; Editing by Kenneth Maxwell)