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Oil futures were little changed on Wednesday as investors digested a monthly report from OPEC that forecasts increased global demand and a weekly report that showed a climb in U.S. inventories.
The American Petroleum Institute reported late Tuesday that U.S. crude supplies rose by 1.1 million barrels for the week ended Jan. 10, according to sources. The API data also reportedly showed a stockpile climb of 3.2 million barrels for gasoline, while distillate stocks rose by 6.8 million barrels. Inventory data from the Energy Information Administration will be released at 10:30 a.m. Eastern Time.
On Wednesday, the Organization of the Petroleum Exporting Countries released a monthly forecast on the global oil market. The oil cartel increased its 2020 world oil demand growth forecast by 140,000 barrels to 1.22 million barrels a day, while also nudging its global economic growth forecast to 3.1% for the year ahead.
OPEC’s increase “mainly reflect[s] an improved economic outlook for 2020,” the report said, with the developing world—especially China and India—expected to be responsible for most of that growth.
West Texas Intermediate crude for February delivery CLG20, -0.34% was off 7 cents, or 0.1%, at $58.17 a barrel on the New York Mercantile Exchange, after gaining 0.3% on Tuesday, while March Brent BRNH20, -0.33% shed 14 cents, or 0.2%, at $64.35 a barrel on ICE Futures Europe, following a 0.5% return in the previous session.
WTI, the U.S. benchmark, closed Monday at its lowest level since Dec. 3, while Brent, the global benchmark, saw its lowest close since Dec. 12.
Oil investors have kept one eye on the Sino-American trade agreement, with a signing of a phase-one agreement slated for 11:30 a.m. Eastern Time. International tensions over trade policy have been one of the biggest headwinds for commodities like crude-oil, which tends to see price gains amid the expectations of healthy economic growth which can foster stronger consumption.
“The oil market is trying to find support along with the lower Bollinger bands and is not getting help from supply data from the American Petroleum Institute (API). But it may find support from the fact that the market may have to reprice in at least a bit of geopolitical risk premium,” wrote Phil Flynn, senior market analyst at The Price Futures Group. Bollinger bands measure the volatility of an asset’s price over time and may suggest prices will revert to the mean of a trading range.
