Oil Prices Drop EIA Boosts U.S Output
Brent crude futures were down 6 cents, or 0.08%, at $72.22 a barrel by 0133 GMT. U.S. West Texas Intermediate crude (WTI) futures were down 13 cents, or 0.19%, at $68.30.
The U.S. Energy Information Administration has slightly raised its expectation of U.S. oil output to an average of 13.23 million barrels per day this year, or 300,000 bpd higher than last year’s record of 12.93 million bpd, up from 13.22 million bpd forecast earlier.
The agency also raised its global oil output forecast for 2024 to 102.6 million bpd, from its prior forecast of 102.5 million bpd. For next year, it expects world output of 104.7 million bpd, up from 104.5 million bpd previously.
This comes after the Organization of the Petroleum Exporting Countries on Tuesday again cut its global oil demand growth forecast to 1.82 million bpd in 2024, down from 1.93 million bpd forecast last month, on weak demand in China, India, and other regions, sending oil prices to their lowest in nearly two weeks.
The EIA forecasts oil demand growth weaker than OPEC, at about 1 million bpd in 2024, although that is up from its prior forecast of about 900,000 bpd.
Market participants are now waiting for the International Energy Agency’s oil market report, due later in the day, and the EIA’s U.S. crude oil and product stockpiles data for further trading cues.
“A weak outlook for demand in China continues to weigh on sentiment. The stronger USD is creating strong headwinds for commodities,” ANZ Research said in a note.
The U.S. dollar rose to near a seven-month high against major currencies on Wednesday after data showed U.S. inflation for October increased in line with expectations, suggesting the Federal Reserve will keep cutting rates.
A firmer dollar makes commodities priced in the greenback expensive for buyers using other currencies.
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