- Oil prices were higher on Tuesday morning as bargain hunters moved in, with WTI trading at $67.86 and Brent changing hands at $72.83.
- Oil prices ended trade on Monday with another loss as demand concerns continue to dominate markets due to doubts over China’s economic recovery.
- The Fed meeting begins today and most analysts expect a pause in rate hikes, a move that might stop the recent collapse in oil prices at least temporarily.
- OPEC l2023 global growth forecast is 2.6%
The prices of oil futures pared the previous day’s losses and went up by more than 1% on Tuesday ahead of the Organization of Petroleum Exporting Countries’ (OPEC) newest report on global crude demand and economic growth. West Texas Intermediate (WTI) for settlements in July grew by 1.15% at 5:29 am CET to sell for $67.91 per barrel. At the same time, Bent for deliveries in August gained 1.42% to go for $72.87 per barrel. Crude oil prices climbed early on Tuesday morning after ending trade on Monday with yet another loss, driven by demand concern. As the latest Fed meeting begins today, however, eyes will be on the U.S., with most analysts expecting the central bank to announce a pause for rate hikes. That would have a positive effect on prices although how durable that effect would be in the context of continued doubts about China’s rate of economic recovery is anyone’s guess. The government announced the purchase of 3 million barrels of crude last week alongside plans for the purchase of another 3 million later in the year. “These 3 million barrels are being purchased for an average price of about $73 per barrel, lower than the average of about $95 per barrel that SPR crude was sold for in 2022, securing a good deal for taxpayers,” the Department of Energy said, as quoted by Reuters, last week. Even so, oil prices have generally remained subdued, whetting bargain-hunting appetites among traders, per Reuters. “Some investors looked for bargains after the previous day’s heavy selling while others held back their positions with speculation that Saudi Arabia may cut production additionally,” a Nomura Securities economist told the news outlet.
OPEC 2023 global growth forecast at 2.6%
The Organization of Petroleum Exporting Countries (OPEC) said in its monthly report released on Tuesday that it sees the global economy growing by 2.6% in 2023, unchanged from its previous forecast. The United States GDP growth was revised up to 1.3% for this year, while the Eurozone economy is still seen growing 0.8% in 2023. China’s economic growth outlook was also unchanged 5.2% in 2023, while the Russian economy is expected to contract 0.5%. The report stressed that economic activities have been steady in the first half of the year but warned uncertainties persist, including high inflation, higher interest rates in the US and the Eurozone, as well as high debt levels in many regions.