U.S. oil rises as inventories fall, OPEC sees solid demand on stronger economic growth

Environment

An oil pump jack is shown in a field on June 27, 2024 in Stanton, Texas.
Brandon Bell | Getty Images News | Getty Images

Oil prices held firm Wednesday as OPEC sees solid demand supported by stronger economic growth this year.

OPEC maintained its oil demand growth forecast of 2.2 million barrels per day for 2024. The cartel revised global economic growth slightly higher for this year to 2.9%, buoyed by a better-than-expected first-half performance in Brazil, Russia, India and China and a rebound in the Eurozone.

Here are today’s energy prices:

  • West Texas Intermediate August contract: $81.34 per barrel, down 0.09%. Year to date, U.S. oil has gained 13.5%.
  • Brent September contract: $84.48 per barrel, down 18 cents. Year to date, the global benchmark is ahead 9.7%.
  • RBOB Gasoline August contract: $2.51 per gallon, down 2 cents, or 0.83%. Year to date, gasoline is up 19.2%.  
  • Natural Gas August contract: $2.35 per thousand cubic feet, little changed. Year to date, gas is down 6.7%.

The oil market is waiting to see if U.S. inventory data will confirm expectations that the market is tightening. Summer fuel demand has had a soft start, but a big draw of 12.2 million barrels of crude and 2.2 million barrels of gasoline for the week ended June 28 indicated that activity was picking up.

Analysts polled by Reuters expect crude stocks fell by 1.3 million barrels last week, and gasoline inventories declined by 600,000 barrels. The Department of Energy will release official data at 10:30 a.m. ET.

The recent oil rally has stalled out with prices falling for three straight days. Tamas Varga, analyst at oil broker PVM, attributed the latest round of selling to revived ceasefire talks between Hamas and Israel as well as Hurricane Beryl.

Oil infrastructure on the Gulf Coast appears to have avoided substantial damage from the storm, but the port of Houston was closed. Varga said the market may expect oil exports to decline as a consequence, which could lead to an increase in inventories when the next round of data is released next week.

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