SINGAPORE: Oil prices rose on Thursday as OPEC forecast relatively strong growth in global oil demand over the next two years, while the market also eyed disrupted US oil production amid a cold blast and tensions in the Middle East.
Brent crude futures gained 49 cents, or 0.6%, to $78.37 a barrel by 0740 GMT, while US West Texas Intermediate crude futures rose 70 cents, or 1.0%, to $73.26.
OPEC, in a monthly report, said world oil demand is expected to rise by a robust 1.85 million barrels per day (bpd) in 2025 to 106.21 million bpd.
For 2024, OPEC saw demand growth of 2.25 million bpd, unchanged from its forecast in December.
However, price gains were capped for now as the market considered mixed drivers.
“Brent crude prices remain broadly stuck in a range as they have been over the past two weeks, as market participants struggle to weigh mixed demand-supply dynamics with prevailing geopolitical tensions,” said Yeap Jun Rong, market strategist at IG.
An unexpected build in US crude stockpiles and challenging conditions for China’s economic recovery continue to cast a shadow over the oil demand outlook, said Yeap, though the market remains wary of geopolitical developments.
In the latest tensions, Pakistan conducted strikes inside Iran targeting Baluchi separatist militants, the country’s foreign ministry said, two days after Iran conducted strikes inside Pakistani territory.
Meanwhile, in top oil-producing US state North Dakota, oil output fell by 650,000 to 700,000 bpd to less than half its typical output, as temperatures dropped below zero Fahrenheit (minus 18 degrees Celsius), the state said.
Oil prices rise 1% on flaring Middle East tensions
US government data on oil inventories is due at 11 a.m. ET (1600 GMT) on Thursday. Domestic crude stockpiles rose last week by 480,000 barrels, according to market sources citing American Petroleum Institute figures on Wednesday.
The International Energy Agency (IEA) expects oil markets to be in a “comfortable and balanced position” this year despite Middle East tensions, amid rising supply and a slowing demand growth outlook, its executive director, Fatih Birol, told the Reuters Global Markets Forum on Wednesday.