Bullish sentiment has been growing in oil markets this week, with inflation in the U.S. slowing dramatically and markets tightening on the back of supply disruptions and production cuts.
News of a marked drop in US inflation growth this week has boosted oil prices, pushing ICE Brent above $80 per barrel for the first time since May. Further buttressed by the market’s tightness coming from Saudi Arabia’s production cuts and Russia’s export curbs – backwardation is steepening again – this week is set to witness the largest gain in months, brushing aside the bigger-than-expected build in US crude inventories.
OPEC remains upbeat about 2024 demand. In its most recent monthly Oil Market Report, OPEC predicted demand growth next year will amount to 2.25 million b/d, only slightly lower than its revised figure for 2023 (2.44 million b/d), double that of the International Energy Agency.
Libya on the brink of another escalation.Oil production has been stopped at Libya’s 70,000 b/d El Feel oilfield on Thursday after tribal protests over the kidnapping of a former finance minister grew into larger unrest that could soon impact the adjacent El Sharara field, too.
Pakistan wants second Russian cargo.The government of Pakistan is negotiating to buy a second shipment of discounted Russian crude, with private refiner PARCO reportedly asking to buy Russian oil, too, as talks have so far been focusing on the state-owned PRL refinery.