The West Texas Intermediate contract for March added $1.39, or 1.81%, to settle at $78.03 a barrel, while the Brent contract for April settled at $82.86 a barrel, up $1.26, or 1.54%
Crude oil futures gained Thursday, shaking off earlier losses on the back of a weak global demand forecast for 2024.
The West Texas Intermediate (WTI) contract for March added $1.39, or 1.81%, to settle at $78.03 a barrel, while the Brent contract for April settled at $82.86 a barrel, up $1.26, or 1.54%.
Oil prices were finding support from a softening dollar after January U.S. retail sales dropped more than expected, said Phil Flynn, analyst with the Price Futures Group.
Futures dropped around 1% earlier in the trading session after the Paris-based International Energy Agency (IEA) forecast demand would increase by 1.2 million bpd this year, down almost 50% from growth of 2.3 million bpd in 2023.
Supply, meanwhile, is expected to surpass demand and increase by 1.7 million bpd this year driven primarily by higher production in the U.S., Brazil, Canada and Guyana, per the IEA.
The expansive post-pandemic growth phase in global oil demand has largely run its course, the International Energy Agency wrote in its February oil market report on Thursday.
Tamas Varga, analyst at oil broker PVM, said the drop earlier in the session was a “knee-jerk” reaction to the IEA report.
Although this year’s demand growth will be much slower than that of 2023, global oil inventories should still drop throughout the current year if OPEC keeps output low, as expected, Varga told CNBC.
OPEC is forecasting a much tighter oil market this year, with demand growing by 2.2 million bpd, surpassing production growth of 1.2 million bpd outside the cartel.
IEA and OPEC are engaged in a battle of the experts, but the market always gives more credence to OPEC since this is the group that actually produces and trades oil, and therefore has better market insight, Manish Raj, MD at Velandera Energy Partners, told CNBC.
He added the market is clawing back Wednesday’s over 1% price decline after the U.S. Energy Department reported commercial crude inventories increased by 12 million barrels.
