Energy
Wednesday, June 12th, 2024 2:49 pm EDT
Key Points
- U.S. crude oil surged over 1% on Wednesday, continuing its upward momentum for the week, supported by optimistic forecasts from OPEC and the Department of Energy regarding stable demand throughout the year.
- The Department of Energy revised its global consumption growth projection to 1.1 million barrels per day (bpd), up from the previous forecast of 900,000 bpd, indicating a potential supply deficit, as world production is anticipated to increase by 800,000 bpd in 2024.
- Martijn Rats, a commodity strategist at Morgan Stanley, anticipates a short-term tightening of the oil market, forecasting a deficit of 1.2 million bpd in the third quarter, potentially driving Brent prices to $86 per barrel. Additionally, Citi analysts foresee a tight third quarter driven by summer fuel demand, although they project a “bear market” later in 2024 and into 2025 due to planned OPEC+ production increases, potentially causing Brent crude prices to fall to $60 per barrel.
U.S. crude oil experienced a more than 1% increase on Wednesday, continuing its rally for the week as both OPEC and the Department of Energy project steady demand throughout the year. The Department of Energy revised its global consumption growth forecast to 1.1 million barrels per day (bpd), signaling a potential supply deficit, as world production is expected to rise by 800,000 bpd in 2024. Martijn Rats, a commodity strategist at Morgan Stanley, predicts a short-term tightening of the oil market, forecasting a deficit of 1.2 million bpd in the third quarter that could drive Brent prices up to $86 per barrel. Presently, West Texas Intermediate (WTI) crude for the July contract stands at $79.16 per barrel, up $1.29, while the August contract for Brent crude is priced at $83.22 per barrel, up $1.30. Additionally, RBOB Gasoline for the July contract is at $2.44 per gallon, with a year-to-date increase of 16.3%, while Natural Gas for the July contract is priced at $3.04 per thousand cubic feet, experiencing a slight decrease. OPEC maintains its demand growth forecast of 2.2 million bpd, citing solid global economic growth of 2.8% in 2024, despite a bearish outlook from the International Energy Agency, which anticipates weakening demand and rising supplies. Citi analysts characterize recent price movements as rangebound, with volatility at a decade low, projecting a tight third quarter driven by summer fuel demand. However, they foresee planned OPEC+ production increases leading to a “bear market” later in 2024 and into 2025, with Brent crude potentially falling to $60 per barrel.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/06/12/crude-oil-prices-today.html
