Key Points:
- Brent crude oil rises to $82.32 per barrel, and WTI rises to $78.42 per barrel.
- US commercial crude oil inventory fell by 1.2 million barrels last week.
- EIA raises the 2024 global oil consumption growth forecast by 200,000 barrels per day to 1.1 million barrels per day.
- Traders await key US inflation data and the outcome of the upcoming Federal Reserve meeting.
Oil prices climbed as reports indicated a decline in US crude oil inventories and an optimistic outlook on global demand. Brent crude oil (Symbol: UKOUSD) increased to $82.32 per barrel, while West Texas Intermediate (WTI) crude oil (Symbol: USOUSD) rose to $78.42 per barrel.
The images above showed the bullish momentum in oil prices, as observed on the VT Markets app.
The market is buoyed by expectations that US commercial crude stocks fell by 1.2 million barrels last week. The Energy Information Administration (EIA) raised its 2024 forecast for global oil consumption growth by 200,000 barrels per day, bringing the total expected growth to 1.1 million barrels per day. This adjustment reflects a stronger outlook for global demand, which supports higher prices. OPEC also maintained its bullish demand-growth estimates, further reinforcing the positive sentiment in the market.
The anticipation of key US inflation data and the outcome of the upcoming Federal Reserve meeting has added to market uncertainty.
How markets respond to the above factors
The reported decline in US crude inventories suggests tighter supply conditions, which typically supports higher oil prices. The upward revision of global oil consumption growth forecast by the EIA also highlights robust demand recovery.
Risks and opportunities for market participants
Oil prices are likely to remain supported by the current sentiment of falling US inventories and higher demand forecasts. However, traders should remain cautious ahead of the U.S. inflation data and the Federal Reserve’s policy announcement, as these events could introduce volatility. Further, if the demand growth projections by the EIA materialize and OPEC maintains its current production stance, oil prices could see sustained support through the year.
Related article: How to trade oil CFDs
There are plenty of trading opportunities given the current momentum of oil. Sticking to a trading strategy and managing risks at a healthy level will be helpful for traders in achieving success in the oil market.
