Opec has once again kept unchanged its bullish forecast for oil demand growth this year, even while others including Saudi state-controlled Aramco continue to see much lower levels of growth.
Oil prices rose in Tuesday trade as geopolitical tensions in the Middle East continued to spur concern, but gains were limited on bearish demand sentiment and as the market waited for monthly reports from oil agencies.
Kuwait Petroleum Corporation CEO Al-Sabah: Global oil demand looks robust.
Al-Sabah: U.S. shale production has helped meet part of the recent growth in world oil consumption.
As part of the voluntary OPEC+ cuts, Kuwait has pledged to voluntarily reduce its crude oil production by 135,000 bpd.
Oil prices fell in early Asian trade on Monday after Israel said it had “concluded” a series of strikes in southern Gaza, slightly easing concerns about supply from the Middle East.
Crude oil inventories at Cushing have dropped to their lowest level for this time of year in over a decade.
The depleting stocks at Cushing and the bearish sentiment on the oil market, especially the recent more negative positioning in WTI Crude, could lead to high prices in the near term.
In the three weeks to January 19, inventories at Cushing fell by more than 5 million barrels.
More oil and gas tankers are now being diverted away from the Red Sea, with some companies and producers avoiding the route. Among the latest, Qatar appears to be sending liquefied natural gas vessels to Europe via the longer route around Africa
Japanese shipping operator Nippon Yusen has become the latest among dozens of shipping companies to suspend sailings through the Red Sea.
Beijing has so far remained tight-lipped about the raging war between Israel and Hamas in the Gaza Strip despite China being Israel’s second-largest trading partner.
Beijing has called for an end to attacks on civilian vessels in the Red Sea.
US President Joe Biden and the World Bank are worried global oil prices could surge even higher if conflict in the Middle East escalates, as the Israel-Gaza war continues and as US and UK attacks on the Iran-backed Houthis in Yemen attempt to blunt their ability to target commercial shipping in the Red Sea.
Analysts: oil prices are likely to remain around current levels this year.
OPEC+ producers now have sufficient spare capacity to potentially counter extreme market tightness and disruptions to oil flows that could result from geopolitical risks in the Middle East.
As of November 2023, the OPEC+ alliance held 5.1 million barrels per day (bpd) of spare oil production capacity—or about 5% of global demand.
Oil prices rose on Thursday after an oil tanker was boarded by an armed group in Oman, raising the prospect of escalating conflict in the Middle East.