One day after the International Energy Agency’s (IEA) increased its projection for this year’s rise in oil demand, oil prices increased on Wednesday due to China’s industrial output and retail sales exceeding estimates.
At 06:47 GMT, U.S. West Texas Intermediate (WTI) crude increased by 15 cents, or 0.2%, to $78.41, while Brent futures gained 18 cents, or 0.2%, to $82.65 a barrel.
October saw a pick-up in economic activity in China, the world’s second-largest economy, as retail sales grew above forecasts and industrial output expanded quickly.
Despite forecasts of weaker economic growth in several major nations, the International Energy Agency (IEA) followed the Organization of the Petroleum Exporting Nations and its allies (OPEC+) in revising its oil demand growth prediction for this year.
The IEA predicts that oil demand will continue to grow. According to a note released by ANZ Research on Wednesday, better-than-expected consumption in China led to an increase in its projection.
The U.S. dollar (.DXY) fell to a two-and-a-half-month low versus a basket of other currencies due to lower U.S. inflation data that raised expectations for an interest rate decrease by the Federal Reserve next spring. Because purchasers paying in different currencies may purchase crude at a lower price, a declining dollar might increase oil demand.
On Wednesday, the U.S. Energy Information Administration (EIA) will make public its first update on the oil inventory in the last two weeks. Because of a systems update, the EIA could not produce a storage report last week.
As per a Reuters poll, oil companies are expected to have added around 1.8 million barrels of crude to U.S. stocks for the week ending Nov. 10, which aligns with the findings of the American Petroleum Institute released on Tuesday.