WTI edges higher around $72.20 on a bullish Oil forecast by IEA, improved Chinese data

• WTI price continues to gain ground on the subdued US Dollar.
• IEA predicts that Global oil consumption will increase by 1.1 million bpd in 2024.
• China’s Industrial Production improved to 6.6% in November.

West Texas Intermediate (WTI) price improves for the third consecutive session on a bullish forecast from the International Energy Agency (IEA) on Oil demand for 2024 and a weaker US Dollar (USD). The WTI price trades around $72.20 per barrel during the Asian session on Friday.

The International Energy Agency (IEA) forecasts that Global oil consumption will increase by 1.1 million barrels per day (bpd) in 2024. Moreover, the US Dollar Index (DXY) drops to near four-month lows on the dovish US Federal Reserve’s (Fed) outlook on interest rates trajectory, which could make Oil cheaper for foreign buyers. However, according to a Reuters survey of 30 economists and analysts, the average expectation for Brent crude in 2024 is $84.43 per barrel.

China’s improved data could bolster the strength of Crude oil prices. As the largest oil importer, positive developments in China’s economic landscape typically result in heightened demand for Crude oil.

The National Bureau of Statistics of China recently disclosed that Industrial Production (YoY) saw an improvement, rising to 6.6% in November compared to the previous 4.6%, surpassing the market’s anticipated 5.6%. On the other hand, China Retail Sales (YoY) experienced a growth of 10.1% from the previous 7.6%, but it fell below the market consensus, which had expected a 12.5% increase.

The People’s Bank of China (PBoC) also opted to maintain the 1-year Medium-term Lending Facility (MLF) rate at 2.5%. Alongside this decision, the central bank addressed the maturation of 650 billion Yuan worth of MLF loans by injecting a substantial 1.45 trillion Yuan—an increased effort to fortify bank liquidity.

The National Assembly of Venezuela has approved a 15-year extension of joint ventures between the state-owned Oil company PDVSA and US Chevron, allowing Venezuela to resume Crude exports to the United States, its largest market.

Moreover, during the two-week summit in Dubai, the COP28’s United Arab Emirates (UAE) presidency pursued a tactical approach, strategically releasing provocative drafts to push negotiators to expose the extent of their positions and seek common ground. As the conference concluded, negotiators reached an agreement advocating for a shift away from fossil fuels. At this historic moment, countries collectively voiced their aspiration to bring an end to the oil age.