Oil prices witnessed a modest increase on Wednesday, recovering slightly after suffering significant declines over the previous week, influenced by the likelihood of a less intense escalation in the Middle East and weak demand.
Prices had dropped over four percent during the previous session following a media report indicating that Israel would refrain from attacking Iran’s oil and nuclear facilities, alleviating concerns about a major conflict in the region.
Additionally, disappointing economic data from China contributed to the decline, as the nation’s oil imports showed a decrease in September. Compounding worries about demand, two prominent oil industry organizations revised down their demand forecasts this week.
Brent crude futures for December delivery rose zero point four percent to $74.55 per barrel, while West Texas Intermediate crude futures also increased by zero point four percent to $70.31 per barrel by 21:12 ET (01:12 GMT).
Read more: Oil prices decline as demand forecast weakens, supply concerns subside
IEA and OPEC concerns affect oil market outlook
The oil market is currently facing challenges due to warnings about rising supply and declining demand from two leading industry organizations this week.
In its monthly report released on Tuesday, the International Energy Agency (IEA) projected a supply surplus in the oil market by 2025 and stated its readiness to address any potential supply disruptions originating from the Middle East. Furthermore, the IEA slightly lowered its demand growth forecast for 2024, attributing this adjustment to sluggishness in China, the world’s largest oil importer.
This adjustment followed the Organization of Petroleum Exporting Countries (OPEC) reducing its demand growth predictions for 2024 and 2025, citing concerns about deteriorating demand in China.
While China has unveiled a range of stimulus measures in recent weeks, investors have been left unsatisfied due to the vague details surrounding the timing and extent of these plans. Additionally, the recent weak economic indicators from China have further dampened market sentiment.
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