Oil Rises As OPEC Demand Outlook Aids Push Past Technical Level
Track the latest crude prices here.
(Bloomberg) -- Oil rose after a bullish demand outlook from OPEC helped crude surpass a key technical level that had served as the ceiling of this year’s narrow trading band.
West Texas Intermediate rose 1.5% to top $78 a barrel, pushing past its 200-day moving average of about $77.40. With bulls also finding support from OPEC’s projections that global oil demand will continue strong growth this year, the breach above the technical threshold raises the possibility of additional upward momentum.
Crude prices also gathered support from the Standard & Poor’s 500 Index paring intraday losses. Still, broader risk-off sentiment capped crude’s gains after US data showed inflation remains elevated, reducing the prospect of imminent interest rate cuts.
Earlier today, the Organization of the Petroleum Exporting Countries’ monthly report showed that the group’s new production cuts were only partially delivered in the first month. The broader OPEC+ alliance plans to decide early next month whether to extend their curbs into the second quarter.
While oil has advanced this year, it’s yet to break decisively higher. The OPEC cuts, as well as nervousness over the conflict in the Middle East and attacks on shipping in the Red Sea, have largely been offset by an uncertain demand outlook and ample output from outside the group.
Meanwhile, a chunk of the vast fleet of tankers that Russia uses to deliver its crude is grinding to a halt under the weight of US sanctions, according to ship-by-ship tracking. That’s another sign that tougher measures by Western regulators might be starting to have tangible effects on Moscow.
Traders are also parsing the International Energy Agency’s outlook for crude supply and demand. The agency estimates that global consumption will increase by 1.2 million to 1.3 million barrels a day in 2024, which will be easily matched by swelling production from the Americas.
©2024 Bloomberg L.P.