Watching oil prices as OPEC says demand to exceed supply in 2023
Brent is back up over $80 a barrel as OPEC points to growing demand in 2023. In its monthly statement, the oil cartel said that as China comes back online it fully expects a rebound in pricing.
(Video Transcript)
Oil prices jump
Oil prices have posted their single biggest daily gains in over a month as OPEC said it expected to see robust global oil demand growth in 2023.
The organisation counts on a potential economic upside coming through from a relaxation of China's Zero-Covid policies. It estimates that world oil demand will rise by 2.25 million barrels per day in 2023 around better off than in 2022.
OPEC's monthly report also showed that production fell in November after OPEC+ agreed to a two million barrel per day reduction in its output target. Output in November fell by 744,000 barrels of oil a day.
All this comes as US crude inventories rose for the first time in four weeks last week, by about 7.8 million barrels. Analysts expected an average of a 3.6 million barrel drawdown.
Brent chart
This API inventories indicates a surplus of oil and has a depressive effect on oil prices. Despite this, we've seen oil now up for 1/4 day in a row. That API number, you can clearly see pull the oil price down back from the highs of over $81 a barrel on brent, closing out yesterday's session at pretty much where we are at the moment, just over $80 a barrel.
But this move up is really on expectations that OPEC is largely bullish on the outlook for oil next year.
US crude
Just a quick update on where we are in terms of the move at the moment, on US crude - the same sort of price action taking us back up above this low point that we had here back on the 28th of November. Currently trading at 7545.
Upside on oil is widely expected to continue going to the back end of the year if markets do believe 2023 forecasts from OPEC.
If you are long on this, your stock goes below recent price action to give you some sort of protection should there be a snap back.
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