Crude oil gains as OPEC signals demand growth in 2024

Crude oil futures traded higher on Wednesday morning as the monthly report by the Organization of the Petroleum Exporting Countries (OPEC) indicated an increase in demand for oil during 2024.

At 9.52 am on Wednesday, May Brent oil futures were at $82.41, up by 0.60 per cent, and April crude oil futures on West Texas Intermediate (WTI) were at $78.06, up by 0.64 per cent.

March crude oil futures were trading at ₹6,469 on Multi Commodity Exchange (MCX) during initial trading on Wednesday morning against the previous close of ₹6,447, up by 0.34 per cent, and April futures were trading at ₹6,459 against the previous close of ₹6,438, up by 0.33 per cent.

Forecast cut for Q1

OPEC Monthly Oil Market Report, released on Tuesday, said the global oil demand growth forecast for 2024 remains unchanged at 2.2 million barrels a day, year-on-year.

It said oil demand growth in OECD Asia Pacific is revised down slightly for the first quarter of 2024, due to expected lower performance in the manufacturing and petrochemical sectors of Japan and South Korea.

“However, this is offset by upward adjustments for India and other Asia, reflecting anticipated improvements during the same period. With this, the OECD is forecast to expand by around 0.2 million barrels a day, and non-OECD by 2 million barrels a day this year,” it said, adding that the global oil demand is forecast to grow by 1.8 million barrels a day, year-on-year, in 2025.

On world oil supply, the OPEC report said non-OPEC production in 2024 is expected to grow by 1.1 million barrels a day, slightly revised down from the previous month’s assessment. The revision takes into account the recently announced additional voluntary production adjustments by some countries in the Declaration of Cooperation (DoC) in the second quarter of 2024 and the rest of 2024.

Meanwhile, a report by industry body American Petroleum Institute showed that crude oil inventories in the US declined by 5.52 million barrels for the week ending March 8, against an increase of 0.42 million barrels a week earlier. Market was expecting crude oil inventories to rise by 0.4 million barrels for the week ending March 8.

Turmeric gleams

March natural gas futures were trading at ₹142.30 on MCX against the previous close of ₹141.70, up by 0.42 per cent.

On the National Commodities and Derivatives Exchange (NCDEX), April turmeric (farmer polished) contracts were trading at ₹18,800 against the previous close of ₹18,672, up by 0.69 per cent.

March cottonseed oilcake futures were trading at ₹2,688 on NCDEX against the previous close of ₹2,697, down by 0.33 per cent.

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