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Crude shrugs off optimistic OPEC outlook, Brent below $83/b

Quantum Commodity Intelligence – Crude oil futures were slightly lower on Tuesday as oil markets did not react to further upbeat demand outlooks from OPEC, focusing instead on the broader macro economy.

First month Jul24 ICE Brent futures were trading at $82.82/b (1340 GMT), compared with Monday’s settlement of $83.36/b, with markets retesting two-month lows.

At the same time, Jun24 NYMEX WTI trade at $78.49/b from Monday’s settlement of $79.12/b.

Crude oil benchmarks have struggled to find clear direction over the past few sessions, although traders said this week should bring some clearer guidance with monthly reports due from OPEC and the IEA, while the US releases its latest inflation figures.

OPEC was first, but prices barely reacted after the producer group stuck with its upbeat outlook for demand in 2024, posting a 2.25 million bpd rise for this year and a 1.85 million rise in 2025, supported by firm global economic growth.

Meanwhile, Wednesday’s April CPI numbers are expected to have a major impact on the timing of the Fed’s first rate as the higher-for-longer mantra gains traction.

“Recent statements by representatives of the US Federal Reserve have led to expectations that interest rates could remain high for an extended period of time. This prospect of sustained high rates is likely to dampen economic growth, which in turn could have a negative impact on Americans’ demand for fuel. consumers,” said RoboForex analyst Andrey Goilov.

Analysts also noted that recent U.S. data showed a sharp decline in U.S. consumer confidence, reinforcing concerns that the economy may be losing its growth momentum.

Uncertainty over OPEC policy earlier in the week weighed on prices, but markets improved when Iraq said it would support expanding current production policy.

Oil markets were also encouraged as surveys continued to show OPEC+ nearing its overall output cap as Russia curbs crude output as it moves from export cuts to production cuts.

On the downside, sluggish margins have raised the prospect that refiners will cut crude output.