Singapore — Oil prices rose on Thursday as oil cartel Opec forecast relatively strong growth in global oil demand over the next two years and the market eyed disrupted US oil production amid a cold blast, as well as geopolitical tension in the Middle East.
Brent crude futures gained 21c, or 0.3%, to $78.09 a barrel by 5.05am GMT, while US West Texas Intermediate (WTI) crude futures rose 40c, or 0.6%, to $72.96.
Opec, in a monthly report, said world oil demand is expected to rise by a robust 1.85-million barrels a day (bbl/day) in 2025 to 106.21-million barrels a day. For 2024, Opec saw demand growth of 2.25-million barrels a day, unchanged from its forecast in December.
However, price gains were capped for now as the market considered mixed drivers.
“Brent crude prices remain broadly stuck in a range as they has been over the past two weeks, as market participants struggle to weigh mixed demand-supply dynamics with prevailing geopolitical tensions,” said Yeap Jun Rong, market strategist at IG.
An unexpected build in US crude stockpiles and challenging recovery conditions in China continue to cast a shadow over the oil demand outlook, said Yeap, though the market remains wary of geopolitical developments.
In the latest tension, Pakistan has conducted strikes inside Iran targeting Baluchi militants, a senior intelligence official told Reuters on Thursday, two days after Iran conducted strikes inside Pakistani territory.
Meanwhile, in top oil-producing US state North Dakota, below-zero degrees (minus 18°C) temperatures caused oil output to fall by 650,000bbl/day-700,000bbl/day, to less than half its typical output, the state said.
US government data on oil inventories is due at 4pm GMT on Thursday. Domestic crude stockpiles rose last week by 480,000 barrels, according to market sources citing American Petroleum Institute figures on Wednesday.
The International Energy Agency (IEA) expects oil markets to be in a “comfortable and balanced position” this year despite Middle East tension, amid rising supply and a slowing demand growth outlook, its executive director, Fatih Birol, told the Reuters Global Markets Forum on Wednesday.
Attacks by Yemen’s Houthis on ships in the Red Sea have forced many companies to divert cargoes around Africa, adding to journey times and costs. The US on Wednesday conducted another round of strikes against Houthi targets in Yemen in retaliation for the attacks on shipping.
The Iran-aligned Houthis say they are acting in solidarity with Palestinians during Israel’s war with Gaza.