Oil Price Fails at MAs Despite Higher OPEC Demand Forecast
Last week Oil prices turned bullish, sending WTI crude $5 higher, but it's stalling today despite higher EIA and OPEC demand forecasts.
Oil prices turned quite bearish early this month, with WTI Crude falling around $8 below $73. However, the decline stalled last week and we saw a bullish reversal which sent the price $5 higher, but buyers seem reluctant to push the price above the 100 SMA (green) which has turned from support into resistance. This moving average was holding during pullbacks lower in May, but it got br0oken and now it seems to have shifted into a resistance indicator.
Yesterday’s market sentiment improvement, after the tumble following Friday’s strong Non-Farm Payroll (NFP) job news, led to a rise in U.S. West Texas Intermediate WTI crude futures to $78.40 a barrel. However, this upward movement was halted by the 100-day Simple Moving Average (SMA), acting as resistance.
Despite another attempt by buyers the following day, supported by EIA projections, the 100 daily SMA continued to resist further advances. Even with potential increases in oil production, as indicated by the EIA projections, they may not be adequate to fully absorb OPEC’s spare capacity.
WTI Oil Chart Daily – Buyers Fail at the 100 SMA
The latest update from OPEC indicates a revision in their projections for Q2 2024, with an increase of 50,000 barrels per day (bpd). However, the overall global oil demand growth prediction for 2024 remains unchanged at 2.25 million bpd.
Similarly, the forecast for 2025 is also unchanged, standing at 1.85 million bpd. Despite the adjustment for Q2 2024, there’s a reduction in the forecast for Q1 2024 oil demand by 50,000 bpd, bringing it down to 103.5 million bpd. These adjustments reflect ongoing assessments of global Oil demand dynamics by the OPEC.
June 11 EIA Crude Oil Demand Forecast
- Energy Information Administration (EIA) has increased its forecast for world oil demand in 2024 by 180,000 barrels per day (bpd), now projecting a 1.1 million bpd increase compared to previous estimates.
- The forecast for 2025 has been raised by 80,000 bpd, with the EIA now expecting a 1.5 million barrels per day year-on-year increase.
- In terms of US output, the EIA foresees a slightly lower increase for 2025, with output expected to rise by 470,000 bpd compared to the previous estimate of 530,000 bpd.
These adjustments reflect evolving trends and expectations in global oil markets, influenced by factors such as economic growth, geopolitical developments, and energy policies.
WTI Live Chart
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