NEW DELHI:
Oil prices
increased on Wednesday on the expectation of strong
global demand
, including in the
United States
, the world’s top consumer. US inflation did not affect the anticipation that the Federal Reserve might begin reducing interest rates soon.
By 0730 GMT,
Brent futures
for May rose 0.3% to $82.20 a barrel, an increase of 28 cents. The April US
West Texas Intermediate crude
contract also rose 0.4% to $77.84, gaining 28 cents.
The Organization of the Petroleum Exporting Countries (OPEC) maintained its projection of robust global
oil demand
growth. They expect a growth of 2.25 million barrels per day in 2024 and 1.85 million barrels per day in 2025. Additionally,
OPEC
raised its economic growth forecast for this year.
In a positive sign of healthy demand, US crude oil inventories and fuel inventories declined last week, as reported by sources citing American Petroleum Institute figures.
Despite the increase in US consumer prices in February due to higher gasoline and shelter costs, analysts still believe that the Federal Reserve may start reducing interest rates in the summer. Lower interest rates support oil demand.
Yeap Jun Rong, a market strategist at IG, stated, ‘The risk environment has largely remained unaffected, as the market firmly believes that the current pricing for a rate cut in June will be sufficient.’
Yeap added that the unexpected decrease in US crude inventories and the positive growth forecasts by OPEC also contributed to the rise in oil prices.
Capital Economics analysts, in a note to clients, stated that they still anticipate the Federal Reserve to begin easing policy ‘around June.’
Oil prices were under pressure in the previous session due to the increase in domestic oil output forecast by the US. Energy Information Administration. However, the decline in prices was limited due to expectations that the output cuts by OPEC+ would slow global oil growth, as well as the recent wave of drone attacks on Russia, including refineries.