Tuesday saw a slight rise in oil prices driven by optimistic market fundamentals after an OPEC report stated that demand is still high, and concerns that supplies may be hampered as a result of US sanctions against Russian oil exports.
By 0722 GMT, Brent crude futures had increased by 23 cents to $82.75 per barrel. WTI oil futures for the US increased by 21 cents to $78.47 per barrel.
After the market saw a significant sell-off during the previous three weeks, oil is beginning to gain some support. According to an email statement from ING analysts, the market is likely to continue in deficit for the duration of the year, even though fundamentals might not be as optimistic as first believed.
They added that if the Saudis continue their further voluntary supply reductions, the surplus they see early 2024 might even disappear.
Speculators were held accountable for the recent decline in prices by the Organization of the Petroleum Exporting Countries in their monthly report. Furthermore, it maintained its relatively optimistic 2024 outlook while marginally raising its expectation for an increase in the world's oil demand in 2023.
Last week, concerns that demand may decline in the two largest oil consumers, China and the United States, caused oil prices to drop to their lowest point since July. October saw an unexpected decline in Chinese exports as well as a sharp drop in consumer prices to the level not experienced since the COVID-19 pandemic.
After selling the most oil ever from the stock last year, the US Department of Energy intends to purchase 1.2 million barrels to help refill the stockpile, which might further boost demand.
A US restriction on Russian oil shipments may cause supply disruptions and raise prices.
The US Treasury Department has taken the largest move since imposing a price ceiling to limit oil earnings to Moscow by sending notifications to ship management firms asking for information on 100 vessels that it believes are in violation of Western sanctions against Russian oil.
According to some analysts, the ongoing talks in Iraq about restarting oil pipeline flows, which will boost crude supply, could have an impact on fundamentals.
In order to restart oil production in the oilfields of the Kurdish area and oil exports from the north via the Iraq-Turkey pipeline, the oil minister of Iraq hopes to come to an agreement with the government of the Kurdistan Region and foreign oil corporations.
Later in the day, the most recent monthly oil market data from the International Energy Agency will be a focal point for the market.
Tuesday will also see the release of US inflation data, and on Wednesday, the US producer price index is due.
Oil prices may be supported by a few factors, according to analyst Leon Li of CMC Markets. These include whether the APEC meeting will enhance Sino-US relations and whether China will continue to lower interest rates to boost the economy.
