Will the rise in crude oil prices impact the markets in the near term?
Also Read: Oil prices rise amid attacks on Russian energy facilities, brent crude at $86/bbl On Monday Iraq announced its intention to reduce crude exports in the coming months by over 100,000 barrels per day compared to the previous month, aiming to counter any increase above its OPEC+ quota recorded in January and February. Iraq remains committed to the voluntary cuts established with the OPEC+ coalition, which have been extended into the second quarter. On the other hand, ongoing Ukrainian drone attacks targeting Russian oil refineries are exacerbating concerns about supply stability.
On the demand side, recent data revealed that China's factory output and investment surpassed expectations at the start of the year, indicating strong demand. A potential economic turnaround in China could lead to increased demand for crude oil from the world's largest importer. In addition, a decline in US crude inventories last week suggested robust demand from the world's leading oil consumer.
Positive economic indicators and investor sentiment in both the US and China have raised hopes for healthy demand from these major crude consumers. This supply-demand mismatch has prompted Morgan Stanley to revise its Brent oil price forecast by $10 per barrel to $90 for the third quarter of 2024. Meanwhile, the FOMC meeting is scheduled to be held on March 19 and 20, 2024, with widespread expectations that the US central bank will maintain interest rates at their current level.
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