OPEC says oil market fundamentals remain strong
November 14, 2023
Crude oil was driven mainly by technical trading yesterday. After last week testing the $75 dollar level where there must have been enough support. WTI crude oil rallied and settled through its 200-day moving average at $78.17. This fact should point the crude oil market higher despite momentum indicators still not rolling over in support of more upside. This morning crude is testing its 10-day moving average which so far is keeping it hemmed in on the upside for now.
OPEC said oil market fundamentals remained strong and blamed speculators for a decline in prices as it slightly raised its 2023 forecast for global oil demand growth and stuck to its relatively high 2024 prediction. OPEC increased its forecast for world oil demand growth in 2023 to 2.46 million bpd, up 20,000 bpd from previous forecast. In 2024, OPEC sees demand rising by 2.25 million bpd, unchanged from last month.
The US government announced plans to buy 1.2 million barrels of crude oil for the Strategic Petroleum Reserve. They are buying it from two companies at a price of $77.57.
I must admit I have been torn on the economy for a long time now. I was convinced the US needed some economic pain to reset things. A year ago, most economist predicted the US was 100% going into a recession which has not happened. In a Bloomberg interview, economist Betsey Stevenson says, the big economic story of 2023 was the disconnect between consumer sentiment and behavior. Although millions of American are down about the economy they’re still buying $499 Christmas trees and $249 animated nutcrackers.
The IEA is now saying that global demand is going to hit a record high of 102 million barrels a day in 2023. Not only did the IEA talk about record demand but OPEC is talking record demand and raised its global oil demand growth forecast by 20,000 barrels a day for this year to 2.46 million barrels per day.
US travel hit a record high in September as drivers logged over 276 billion miles on the roads and they are not done yet. We are also getting predictions of record travel over the upcoming Thanksgiving Day holiday.
Reuters reported that major US airlines and the Transportation Security Administration (TSA) said Monday they expected record air travel over the Thanksgiving holiday air travel period. Airlines for America, an industry group representing American Airlines, United Airlines, Delta Air Lines, and others forecast 29.9 million passengers between November 17-27, and all-time high.