In its monthly market report of the Petroleum published on friday, The International Energy Agency (IEA) lowered its global oil demand growth forecast for 2024 by 130,000 barrels per day (bpd), to 1.2 million bpd..
Highlighted conclusions
Observed global oil inventories increased by 43.3 million barrels in February, reaching their highest level in seven months.
Global oil production in 2024 will increase by 770,000 bpd, to 102.9 million bpd, driven by non-OPEC+ countries and the United States.
By 2025, oil demand will grow by 1.1 million bpd due to a lower economic outlook than 2.9% GDP growth next year.
China's share of global oil demand growth will fall from 79% in 2023 to 45% in 2024 and 27% in 2025.
China's release of pent-up demand in 2023 following the pandemic has come to an end.
Warm weather reduced heating fuel use in the OECD and the decline in the factory sector in advanced economies affected industrial fuel demand.
Market reaction
At the time of writing, WTI is at intraday highs of $85.50, up 0.34% daily.
WTI Oil FAQ
What is WTI oil?
WTI oil is a type of crude oil that is sold in international markets. WTI stands for West Texas Intermediate, one of the three main types that include Brent and Dubai crude. WTI is also known as “light” and “sweet” for its relatively low gravity and sulfur content, respectively. It is considered a high-quality oil that is easily refined. It is sourced in the United States and distributed through the Cushing facility, considered “the pipeline junction of the world.” It is a benchmark for the oil market and the price of WTI is frequently quoted in the media.
What factors determine the price of WTI oil?
Like all assets, supply and demand are the main factors that determine the price of WTI oil. As such, global growth can be a driver of increased demand and vice versa in the case of weak global growth. Political instability, wars and sanctions can alter supply and impact prices. The decisions of OPEC, a group of large oil-producing countries, is another key price factor. The value of the US Dollar influences the price of WTI crude oil, as oil is primarily traded in US dollars, so a weaker Dollar can make oil more affordable and vice versa.
How do inventories influence the price of WTI oil?
Weekly oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) influence the price of WTI oil. Changes in inventories reflect the fluctuation of supply and demand. If the data shows a decline in inventories, it may indicate an increase in demand, which would drive up the price of oil. An increase in inventories can reflect an increase in supply, which drives down prices. The API report is published every Tuesday and the EIA report the next day. Their results are usually similar, with a difference of 1% between them 75% of the time. EIA data is considered more reliable since it is a government agency.
How does OPEC influence the price of WTI oil?
OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 oil-producing nations that collectively decide member countries' production quotas at biannual meetings. Their decisions often influence WTI oil prices. When OPEC decides to reduce quotas, it can restrict supply and drive up oil prices. When OPEC increases production, the opposite effect occurs. OPEC+ is an expanded group that includes ten other non-OPEC member countries, including Russia.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
