Global oil prices surged on Thursday, propelled by optimistic forecasts from the International Energy Agency (IEA) and the Organization of the Petroleum Producing Countries (OPEC) regarding robust growth in worldwide oil demand for the current year. Brent crude futures experienced a notable increase of 0.4%, reaching $78.19 per barrel by 1411 GMT, while U.S. West Texas Intermediate crude futures rose by 0.8%, hitting $73.16.
According to Reuters, the IEA, in its monthly report, adjusted its 2024 oil demand growth projection to 1.24 million barrels per day (bpd), a surge of 180,000 bpd from its previous estimate. Improved economic growth and lower crude prices in the fourth quarter were cited as contributing factors. Concurrently, OPEC maintained its forecast of 2.25 million bpd demand growth for the current year, with expectations for a robust increase of 1.85 million bpd in 2025, totaling 106.21 million bpd.
Despite geopolitical tensions in the Middle East and concerns over rising supply and slowing demand, the IEA’s executive director, Fatih Birol, expressed confidence that the oil market would remain “comfortable and balanced” in 2024. Recent attacks by Yemen-based Houthi militants in the Red Sea, disrupting shipping routes, have failed to significantly impact investor sentiment, with oil prices exhibiting range-bound trading.
The U.S. conducted retaliatory strikes against Houthi targets in Yemen on Wednesday, responding to attacks on shipping. Meanwhile, heightened geopolitical tensions were evident as Pakistan conducted strikes inside Iran, targeting Baluchi separatist militants, just days after Iranian strikes within Pakistani territory.
In the top U.S. oil-producing state, North Dakota, extreme cold weather led to a substantial decrease in oil output, ranging between 650,000 to 700,000 bpd. Investors are now eagerly awaiting U.S. government data on oil inventories, scheduled for release at 11 a.m. ET (1600 GMT) on Thursday, following reports of a 480,000 barrel increase in crude stockpiles last week, according to the American Petroleum Institute. The global oil market appears well-supplied, benefiting from robust growth outside the OPEC producer group.