Crude oil began the week with a decline as traders took profits from last week’s rally and settled down to wait for market forecasts due this week by OPEC and the International Energy Agency.
Last week, crude oil booked its sharpest weekly price rise since last October, largely on expectations of a demand rebound in China after the country reversed its zero-Covid policy that had hobbled industrial activity and, consequently, oil demand for three years.
Brent crude settled at over $85 per barrel last Friday and WTI ended the week at close to $80 per barrel, both benchmarks adding more than 8 percent during the week.
OPEC is due to release its latest Monthly Oil Market Report tomorrow and traders are waiting to see if the cartel has revised its oil demand expectations for the year from last month’s report.
In December, OPEC forecast that oil demand this year would grow by 2.2 million bpd, down from 2.5 million bpd last year. Demand growth from the OECD countries was forecast at a modest 300,000 bpd while non-OECD growth was seen at 1.9 million bpd. Non-OPEC supply, according to OPEC, was to grow by 1.9 million bpd as well this year, according to the December MOMR.
“Now with China opening, hopefully we will see a pickup in demand and when we meet, we will analyze that as usual. We always take the decision that serves the balancing of the market,” UAE’s oil minister, Suhail al-Mazrouei, said on the sidelines of the Atlantic Council’s Global Energy Forum, which took place in Abu Dhabi this weekend.
For now, the oil market remains stable, he added, despite the G7 price cap on Russian exports.