Crude Oil News Today: Ready to Post 3% Weekly Gain on Back of IEA Forecast

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Weekly Gains Despite Friday Price Dip

Oil prices witnessed a slight decrease on Friday, with Brent crude dropping to $84.83 a barrel and West Texas Intermediate (WTI) crude falling to $80.70. However, the market is poised to achieve an overall weekly gain exceeding 3%. This uptick is primarily driven by the International Energy Agency’s (IEA) upward revision of its 2024 oil demand forecasts and an unexpected reduction in U.S. crude stockpiles.

At 10:49 GMT, Light Crude Oil Futures are trading $80.64, down $0.62 or -0.76%.

IEA Raises Demand Forecast; Geopolitical Tensions Influence Market

The IEA’s recent report shows a significant rise in oil demand projections for 2024, estimating an increase of 1.3 million barrels per day (bpd), a 110,000 bpd jump from last month. These figures suggest a potential supply deficit, especially if OPEC+ continues its current production cuts. Additionally, global events, including Houthi attacks impacting Red Sea shipping and Ukrainian strikes on Russian refineries, have further heightened market attentiveness to supply disruptions.

U.S. Stockpile Decrease and Dollar Strength

In a surprising turn, U.S. crude oil inventories fell as refineries enhanced processing and gasoline demand increased. This decline contrasts with the strengthening of the U.S. dollar, which generally makes crude more expensive for holders of other currencies. These contradictory trends highlight the complex interplay of factors shaping the oil market.

Economic Indicators and Market Outlook

The decision of China’s central bank to maintain its key policy rate and the anticipation of U.S. Federal Reserve rate cuts add layers of economic complexity. In the U.S., despite signs of slowing economic activity, a surge in producer prices indicates underlying inflationary pressures.

Short-Term Market Forecast

Considering the above factors, the oil market appears cautiously optimistic. The combination of increased demand forecasts, geopolitical tensions, and fluctuating stockpile levels suggest a bullish short-term outlook, with prices likely to remain resilient or experience modest gains in the near future.

Technical Analysis

Daily Light Crude Oil Futures

Light crude oil futures traders are taking a breather on Friday after a stellar performance the last two session. Strong upside momentum and a continuation of the uptrend have bullish traders eyeing $82.68.

On the downside, the market is supported by the 200-day moving average at $81.26 and the 50-day moving average at $75.97. Both represent the long-term and intermediate-term trends, respectively.

This article was originally posted on FX Empire

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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