The U.S. energy authority predicted slightly stronger demand and tighter supply for oil moving into 2023, which led to an increase in price on Thursday. The global benchmark, London-traded Brent oil futures, increased 1.1% to $88.47 per barrel, while U.S. West Texas Intermediate crude oil futures increased by 0.8% to $82.59 per barrel. Through the fourth quarter, Brent oil is predicted by the EIA to average approximately $98. However, it also anticipates a decrease in global oil demand in 2023 from 2022.
However, the U.S. Energy Information Administration (EIA) stated in its monthly Short Term Energy Outlook report that it anticipates an increase in global crude demand in the fourth quarter of 2022 and the first quarter of 2023 as countries switch to heating oil in the winter due to rising natural gas prices. Demand may rise, especially in Europe, which is dealing with an energy crisis brought on by Russia’s closure of a crucial natural gas pipeline to the continent.
Numerous poor demand signs are putting pressure on oil prices in the foreseeable future. The world’s top oil consumer, China, saw its crude imports fall by about 10% in August, according to data released on Wednesday.Markets also worried about global interest rate increases, which tend to restrain spending and reduce demand for crude. On Wednesday, Canada raised rates to their highest level in 14 years, while the ECB is scheduled to raise rates for the first time in 11 years later in the day.
Furthermore, according to data from the American Institute of Petroleum, U.S. crude stockpiles unexpectedly increased last week, stoking concerns about a slowdown in global oil consumption. However, a reduction in gasoline inventories indicated that consumer demand in the United States was still high.Trading concerns over the impact of slower economic growth and rising interest rates on petroleum consumption caused oil prices to fall from recent highs.
