WTI crude soars to 10-month high on supply cuts, and global demand for 2024

• WTI trades at $88.49 per barrel, up 1.95%, driven by Saudi Arabia and Russia’s output cuts of 1.3 million bpd.
• OPEC projects a rise of 2.25 million barrels per day in oil demand by 2024, signaling robust global economic growth.
• US inflation data due this week could impact WTI prices; a higher-than-expected reading may trigger speculations of a Fed rate hike.

Western Texas Intermediate (WTI), the US crude oil benchmark, climbed more than 2% to a 10-month high in the mid-North American session, as oil supply is projected to remain tight. That, alongside supply cuts by oil exporting countries, underpins WTI price. At the time of writing, WTI is trading at $88.49 per barrel, up 1.95%.

Oil prices soar amid OPEC projections, geopolitical factors as markets eye US CPI

The latest report from the Organization of Petroleum Exporting Countries (OPEC) foresees oil demand will rise by 2.25 million barrels per day (bpd) in 2024. The OPEC stuck to its robust growth projections in global oil demand in 2023 and 2025, suggesting that major economies are stronger than expected.

Saudi Arabia and Russia’s crude oil output cut of 1.3 million barrels per day until December 2023 is the main driver behind the recent climb in oil prices. Also, floods and storms in Eastern Lybia continued to weigh on the oil supply, as the four major oil exports remained closed since the weekend.

In the meantime, Kazakhstan revealed that its oil production fell to 213,8000 metric tons on September 11 from 243,500 tons as maintenance work began on the pipelines.

Aside from this, traders are bracing for data released by the US Energy Information Administration (EIA) office and the International Energy Agency (IEA). A Reuters poll shows analysts estimate a drop of 2 million barrels of crude from US stockpiles during the week ending on September 8.

Oil traders are also watching data from the US Department of Labor, which would unveil US inflation numbers. If the data exceeds estimated to the upside, that could weigh on the WTI price, as speculations for another Fed rate hike will rise, implying the US Dollar would climb. Otherwise, expect further WTI upside.

WTI Price Action – Daily chart