Oil prices rose on Thursday as the International Energy Agency (IEA) joined the Organization of the Petroleum Exporting Countries in forecasting relatively strong growth in global oil demand this year, with price impetus also coming from disruption to U.S. output and geopolitical risks in the Middle East.
Brent crude futures gained two cents to $77.90 a barrel while U.S. West Texas Intermediate crude futures rose 22 cents, or 0.2%, to $72.72.
The IEA now expects oil demand to grow by 1.24 million barrels per day (bpd) in 2024, up 180,000 bpd from its previous projection, its monthly report said. The agency cited improved economic growth and lower crude prices in the fourth quarter.
For its part, OPEC had said on Wednesday that it expected demand growth of 2.25 million bpd this year, unchanged from its forecast in December. The producer group also said oil demand is expected to rise by a robust 1.85 million bpd in 2025 to 106.21 million bpd.
The IEA’s executive director, Fatih Birol, told the Reuters Global Markets Forum on Wednesday that he expects oil markets to be in a “comfortable and balanced position” this year despite Middle East tensions, rising supply and a slowing demand growth outlook.
Oil’s rangebound trading in recent days reinforces the narrative that investors are shrugging off concern that tankers may be at risk from attacks in the Red Sea, said Ehsan Khoman, analyst at bank MUFG.
Attacks by Yemen-based Houthi militants against ships in the Red Sea have forced many companies to divert cargoes around Africa, adding to journey times and costs. The U.S. on Wednesday conducted another round of strikes against Houthi targets in Yemen in retaliation for the attacks on shipping.
