On Wednesday (September 14), international oil prices were basically stable. Despite U.S. consumer prices unexpectedly rising in August and fears that the Federal Reserve will further accelerate interest rate hikes next week, two industry groups forecast strong demand growth ahead.
At 16:22 Beijing time, NYMEX crude oil futures rose 0.10% to US$87.40/barrel; ICE Brent crude oil futures rose 0.07% to US$92.27/barrel.
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 soaring inflation.
In its monthly report, OPEC said oil demand would rise by 3.1 million bpd in 2022 and 2.7 million bpd in 2023, unchanged from last month. “Oil demand in 2023 is expected to continue to be supported by the solid economic performance of major consuming countries, as well as potential improvements in Covid-19 restrictions and reduced geopolitical uncertainty.”
The International Energy Agency (IEA) said on Wednesday it lowered its forecast for demand growth this year by 110,000 bpd to 2 million bpd, with rich countries in the Organisation for Economic Co-operation and Development (OECD) accounting for most of this year’s growth. But the IEA said global oil demand growth would recover strongly in 2023, with countries outside the OECD supporting growth next year.
However, the U.S. Labor Department released higher-than-expected inflation data for August on Tuesday (September 13), and the market is worried that the Federal Reserve may further increase interest rates this month, thereby putting pressure on dollar-denominated commodities. According to the latest data from the CME Group’s “FedWatch” tool, the Federal Reserve has decided to raise interest rates by at least 75 basis points for the third consecutive time this month, and the probability of raising interest rates by 100 basis points is more than 30%.
A strong dollar and expectations of another massive rate hike by the Federal Reserve weighed on market sentiment. The U.S. is the biggest uncertainty, and if the demand outlook weakens, oil could resume its downward trajectory since the start of the summer. “
The U.S. may begin replenishing its emergency oil reserves when crude falls below $80 a barrel, Bloomberg reporters said on Twitter, citing unnamed sources. The Biden administration began releasing the Strategic Petroleum Reserve this year to curb a surge in prices caused by high energy prices.
The American Petroleum Institute (API) inventory data released overnight showed that U.S. crude oil inventories unexpectedly rose by 6.035 million barrels in the week to September 9. The official US Energy Information Administration (EIA) weekly inventory data will be released at 22:30 Beijing time on Wednesday.