Oil futures prices ended the day higher after falling earlier in the morning. The reversal was caused by the US Government’s Energy Information
Administration’s optimistic projection of demand and the economy.
“A monthly report by the agency projected that Gross Domestic Product (GDP) growth would increase by 1.9% in 2023, up from 1.5% in a previous forecast”, say analysts at ING.
EIA also expects Brent (CCOM:OILBRENT) crude oil prices to average $86 in the second half of 2023, about $7 higher than the previous forecast.
US oil production is expected to rise by 850,000 barrels per day (bpd) to a record 12.76 million bpd in 2023, the report added, surpassing the last peak of 12.3 million bpd in 2019.
Crude oil prices (CCOM:OILCRUDE) have been rising since June, mainly because of Saudi Arabia’s prolonged voluntary production cuts, as well as rising global demand, the report said.
“We expect these factors to continue to reduce global oil inventories and put pressure on oil prices in the coming months,” ELA said.
Weighing prices on Tuesday, however, China’s oil imports in July fell 18.8% mom to the lowest daily rate since January, but were still up 17% mom.
Overall, imports from China contracted by 12.4% in July, much more than the expected 5% drop. Exports fell 14.5%, compared with a 12.5% drop pointed by economists.
The price of WTI oil contract traded on Nymex for delivery in September rose 1.03%, quoted at US$82.92 a barrel. The price of the Brent contract traded on the ICE platform, with delivery in October, increased 0.80%, quoted at US$ 86.17 a barrel.