Oil pushed up by strong demand in early Wednesday trade

Expected strong global demand pushed oil prices up on early Wednesday trade, notably in the United States, despite ongoing concerns about its inflation rate, according to Reuters.

Brent futures for May delivery saw a 0.6 per cent increase, reaching $82.38 per barrel, while April US West Texas Intermediate crude also rose by 0.6 per cent to $78.03.

The Organisation of the Petroleum Exporting Countries (OPEC+) maintained its prediction of strong oil demand growth globally in 2024 and 2025 and raised its economic growth forecast for the current year. US crude oil and fuel inventories decreased last week, indicating healthy demand.

Analysts anticipate the Federal Reserve may commence rate cuts in the summer, notwithstanding solid US consumer price increases in February. Lower rates typically boost oil demand. Market sentiment remains largely unchanged, with expectations of a rate cut in June.

Unexpected declines in US crude inventories and optimistic growth forecasts by OPEC+ further buoyed prices. Capital Economics analysts foresee the Fed easing policy around June.

While US domestic oil output forecasts were raised by the Energy Information Administration, expectations persist that OPEC+ output cuts will mitigate global oil growth, alongside recent drone attacks in Russia, including on refineries.