October 05, 2023 (MLN): Oil prices inched up on Thursday after experiencing a major drop in Yesterday’s trading session as the market assessed the sluggish demand outlook.
Brent crude is currently trading at $85.79 per barrel, up by 0.31% on the day.
While West Texas Intermediate crude (WTI) is trading at $83.56 per barrel, up by 0.20% on the day.
To note, both benchmarks went down by over 5% in the previous trading session on a weak demand outlook.
The OPEC+ ministerial panel made no changes to the group's oil output policy, and Saudi Arabia said it would continue with a voluntary cut of 1 million barrels per day (bpd) until the end of 2023, while Russia would keep a 300,000 bpd export curb until the end of December, as Reuters reported.
"We continue to see the market in deficit through the fourth quarter and the softer prices reduce the probability OPEC will ease supply constraints," National Australia Bank analysts said in a note.
On the downside, the Eurozone economy probably shrank last quarter, according to a survey which showed demand fell in September at the fastest pace in almost three years as consumers reined in spending amid rising borrowing costs and prices.
The latest data also showed a sharp decline in U.S. gasoline demand. Finished motor gasoline supplied, a proxy for demand, fell last week to about 8 million bpd, its lowest since the start of this year, the U.S. Energy Information Administration (EIA) reported on Wednesday.
Moreover, according to Citigroup's latest predictions, Brent Crude is expected to drop to $70 a barrel by 2024 as the global market is expected to swing to surplus by next year.
