Brent futures back at $80/bbl as OPEC, IEA forecast increase in global oil demand

Front-month ICE Brent has gained $1.39/bbl in the past day, to $80.73/bbl at 09.00 GMT.

PHOTO: Getty Images

Upward pressure:

OPEC and the International Energy Agency (IEA) have forecast increased global oil demand next year, in their respective monthly reports. After a period of gloomy demand prospects with a backdrop of China's zero-Covid policy and global recession fears, this outlook is likely to lift sentiments.

OPEC’s own production of crude oil has averaged 28.83 million b/d in November, lower by 744,000 b/d on the month, the report says. This is nearly in line with an Argus Media survey estimates of a 770,000 b/d decline in November.

Meanwhile, the closure of the Keystone pipeline continues to hold up prices. The Canada-based pipeline operator TC Energy has still not given a timeline for restarting the operations.

China will further ease some of its Covid-19 containment measures, which will include making international travel to the country less troublesome, reports Reuters citing China’s ambassador to the US.

Downward pressure:

Going by an American Petroleum Institute (API) estimate, US crude inventories have seen an unexpected build of 7.8 million bbls, for the week ended 9 December. Official Energy Information Administration (EIA) figures are due to come out at 15.30 GMT today.

The fear that recessions in the US and Europe will hurt demand remains a headwind for crude prices in the near term. With warnings of a "mild to serious" recession next year, investors will be monitoring economic activity and trade data closely for further indications.

By Konica Bhatt

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