WTI inches lower to near $77.70 despite a strong OPEC’s outlook for global demand

• WTI price moves lower despite a strong outlook for global oil demand.
• OPEC maintained its previous demand forecasts unchanged with a rise of 2.25M bpd in 2024 and 1.85M bpd in 2025.
• Fed is still anticipated to begin implementing rate cuts in the summer, despite persistent inflationary pressures.

West Intermediate Texas (WTI) oil price edges lower to near $77.70 per barrel during the Asian hours on Wednesday. However, Crude oil prices could receive upward support on a strong outlook for global demand. The Organization of the Petroleum Exporting Countries (OPEC) stuck to its forecast for relatively strong growth in global oil demand in 2024 and 2025.

On Tuesday, OPEC kept its previous forecasts unchanged in a monthly report that world oil demand will rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025. OPEC also said a "robust dynamic" for economic growth towards the end of 2023 was expected to extend into the first half of 2024 and raised its 2024 economic growth forecast by 0.1%.

Despite the rise in US inflation in February, the Federal Reserve (Fed) is still expected to initiate rate cuts in the summer. Lower borrowing costs are anticipated to bolster economic activities in the United States (US), potentially supporting Crude oil demand. Furthermore, a weaker US Dollar would decrease the cost of purchasing Crude oil for other nations, which in turn, would improve oil demand.

In February, US CPI (YoY) rose by 3.2%, surpassing estimates of 3.1%. The monthly index met expectations at 0.4%, higher than the 0.3% seen previously. Moreover, API Weekly Crude Oil Stock surprisingly fell in the week ending on March 8, with a decline of 5.521 million barrels, compared to an expected increase of 0.4 million barrels and the previous 0.423 million barrels. Traders will now focus on the upcoming EIA Crude Oil Stocks Change data.