Oil extends gains on softer US inflation as Brent hovers above $80/bbl; OPEC upbeat on 2024 demand growth

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₹6,278 per bbl, having swung between ₹6,185 and ₹6,299 per bbl during the session so far, compared to their previous close of ₹6,213 per bbl.   IEA demand forecasts: In the latest insights on the supply-demand balance, a report by the International Energy Agency (IEA) on Thursday predicted oil demand would hit a record high this year, but that broader economic headwinds and interest rate hikes meant the increase would be slightly less than previously anticipated. The IEA now sees oil demand rising by 2.2 million barrels per days (mbd) this year, down from its previous forecast of an increase of 2.4 mbd.

The Paris-based organisation which unites energy consuming nations, expects global demand to hit a record 102.1 mbd this year. China will account for 70 per cent of the global demand increase even though the rebound in its economy has appeared to falter. "China's oil demand remained robust despite rising unemployment, renewed property market stress and a general slump in business and consumer sentiment," said the IEA in its regular monthly report on oil markets.

Central banks in leading industrial nations have jacked up interest rates in an effort to bring down inflation, but the higher borrowing costs suppress economic activity and risk provoking recessions that would lead to a drop in oil demand. Such concerns have kept crude prices in check even though Saudi Arabia and fellow OPEC cartel nations along with their allies have limited or even cut output for the past year. Their cuts have been largely offset by higher output from other producers, with oil supply still outpacing demand.