During Asian trading hours on Wednesday, the price of West Texas Intermediate (WTI) crude oil lingered around $77.90 per barrel, buoyed by optimistic global demand projections from the US Energy Information Administration (EIA). Reuters reports that the EIA has revised its 2024 forecast for world oil demand growth upward to 1.10 million barrels per day (bpd), compared to its previous estimate of 900,000 bpd. Concurrently, the Organization of the Petroleum Exporting Countries (OPEC) has maintained its optimistic outlook for 2024, projecting robust growth in global oil demand, citing anticipated increases in travel and tourism in the latter half of the year.
Commenting on the market sentiment, analysts at the energy consulting firm Gelber and Associates observed, “Futures are higher as expectations of summer demand are supportive of prices despite the broader macro landscape remaining less optimistic than weeks previous,” as reported by Reuters.
The recent robust US jobs report has reinforced the Federal Reserve’s hawkish stance on monetary policy. Market participants anticipate the Fed to persist with its strategy of maintaining higher borrowing costs over an extended period, potentially tempering economic expansion and curbing oil demand. Investors are eagerly awaiting the Federal Reserve’s policy decision, coupled with the release of US inflation figures for May on Wednesday.
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