Summary:
Oil prices fell slightly on Thursday due to higher global production expectations, weak demand growth forecasts, and a stronger dollar.
Oil prices dropped slightly early on Thursday on expectations of higher global production amid forecasts for weak demand growth, while a firmer dollar also took a toll on prices.
The EIA has revised its U.S. oil output forecast slightly upwards to an average of 13.23 million barrels per day (bpd) for 2024, up from the prior estimate of 13.22 million bpd. Global oil production is also expected to tick up slightly, now forecasted at 102.6 million bpd, an increase from 102.5 million bpd.
Meanwhile, OPEC adjusted its global oil demand growth forecast downward for 2024, predicting growth of 1.82 million bpd instead of the previously expected 1.93 million bpd, primarily due to weaker demand signals from Asia.
On the geopolitical front, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman reiterated the need for close coordination within the OPEC+ group during a call this Wednesday.
In other developments, Israeli military strikes resulted in at least 22 casualties in the Gaza Strip as forces advanced further into Beit Hanoun, leading to the displacement of remaining residents.
The U.S. dollar climbed to its highest in nearly seven weeks amid cooling inflation progress. The Consumer Price Index (CPI) rose as anticipated in October, with housing-related costs such as rent contributing to the increase.
Brent Crude looks set to retest the solid support around $70. If the level still holds, the triple bottom chart will bolster the case of a rally above 50 SMA.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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