Oil rises by more than 1% as OPEC's report allays worries about demand

 Oil rises by more than 1% as OPEC's report allays worries about demand

By 1:21 p.m. ET (1821 GMT), Brent oil futures had increased by one dollar, or 1.2%, to $82.43 per barrel. The price of a barrel of US West Texas Intermediate (WTI) oil futures increased by one dollar, or 1.3%, to $78.17.

On November 13, oil prices increased by more than 1% as concerns about declining demand in China and the US were allayed by OPEC's monthly market report.

By 1:21 p.m. ET (1821 GMT), Brent oil futures had increased by one dollar, or 1.2%, to $82.43 per barrel. The price of a barrel of US West Texas Intermediate (WTI) oil futures increased by one dollar, or 1.3%, to $78.17.

OPEC blamed speculators for the price decline, saying that the fundamentals of the oil market remained robust in their monthly report. OPEC maintained its comparatively high 2024 prognosis while slightly raising its estimate for the rise of the world's oil consumption in 2023.

Craig Erlam, senior market analyst at OANDA, said in a note that "the OPEC monthly oil market report attempted to push back against demand concerns, mentioning overblown negative sentiment surrounding Chinese demand while raising consumption forecasts for this year as well as leaving them unchanged for next."

The US Energy Information Administration (EIA) said last week that the US would produce somewhat less crude oil this year than anticipated and that consumption will decline.

Concerns over the prospects for oil demand were further stoked by Federal Reserve Chair Jerome Powell's remarks last week that the bank may hike interest rates once more.

Fears of waning demand were further stoked by weak economic statistics released by China this week, which is the largest importer of crude oil worldwide. China's refiners requested reduced supplies for December from the world's biggest exporter, Saudi Arabia.

Fawad Razaqzada, an analyst at City Index, said that while oil prices dropped around 4% last week, marking their first three-week losing run since May, they may have bottomed out.

Given the recent decline in oil prices, Saudi Arabia and Russia are probably going to stick with their voluntary production cutbacks until the end of the year. As a result, this ought to reduce any negative effects, according to Razaqzada.

Top oil exporters Saudi Arabia and Russia, who are members of OPEC+, said last week that they would keep reducing their voluntary oil production until the end of the year. This is because worries about demand and economic growth are still weighing heavily on the crude markets.

The 26th of November is when OPEC+ will next meet.