Oil prices extend uptrend ahead of US CPI data

An optimistic prognosis for oil consumption and a tighter supply have caused the WTI crude price to rise to $88.40. Global oil production is expected to increase to 101.2 million barrels per day (bpd) in 2023 and 102.9 million bpd in 2024, according to the US Energy Information Administration.

According to the API report, US crude oil stockpiles increased by 1.174 million barrels from the previous week’s decline of 5.521 million barrels. The US Consumer Price Index (CPI) and Wednesday’s EIA Crude Oil Stocks Change are anticipated by oil markets.

The benchmark price for US crude oil is currently around $88.40 on Wednesday. After the Organisation of the Petroleum Exporting Countries (OPEC) predicted a jump in oil demand, WTI prices rose to their highest level in ten months.

Despite obstacles including rising interest rates and increasing inflation, OPEC remained confident in its projection for a significant increase in the world’s oil demand in 2023 and 2024. In a monthly report, OPEC forecasted that world oil demand will increase from 2.44 million barrels per day (bpd) in 2023 to 2.25 million bpd in 2024. Both forecasts remained the same from the prior month.

The US Energy Information Administration also predicted that while global demand would increase from 99.2 million barrels per day in 2022 to 101.0 million barrels per day in 2023 and 102.3 million barrels per day in 2024, global oil output would increase from 99.9 million barrels per day (bpd) in 2022 to 101.2 million bpd in 2023 and 102.9 million bpd in 2024.

According to data from the American Petroleum Institute (API), US crude oil stocks increased by 1.174 million barrels for the week ending September 8 compared to the previous week, when they decreased by 5.521 million barrels.

Additionally, Saudi Arabia and Russia’s voluntary limitations in oil output have resulted in a tighter supply, which has driven up WTI prices recently. However, the two biggest oil exporters in the world—Saudi Arabia and Russia—have announced that they will continue to reduce oil production through the end of 2023. Through the end of 2023, the reduction will bring Saudi Arabia’s crude production closer to 1.3 million barrels per day.

Additionally, the OPEC report stated that even while US sanctions on Tehran are still in effect, OPEC oil production grew in August as a result of an increase in Iran’s production.

However, as China is the world’s top oil importer, concern over the downturn in the Chinese economy may limit the upside potential for the WTI. The Chinese Retail Sales and Industrial Production for August will provide new momentum for the oil market.

Looking forward, the EIA Crude Oil Stocks Change for the week ending September 8 is due on Wednesday. Oil markets are waiting for the release of the US Consumer Price Index (CPI) for August. The price of WTI expressed in USD could be greatly impacted by these occurrences. The data will serve as a guide for oil traders as they look for trading opportunities around the WTI levels.