Oil Climbs As OPEC Ridicules IEA Prediction Of Peak Demand For Crude

But gains were capped by disappointment over the Fed's reluctance to reduce rates: File Image/Pixabay

The familiar see-saw trading pattern of oil was exhibited on Thursday as investors weighed the implications of rising stockpiles and the U.S. Federal Reserve delaying rate cuts with news that a cooling labour market is slowing inflation.

As of 1712 GMT, Brent was up 31 cents at $82.91 per barrel, and West Texas Intermediate rose 25 cents to $78.75.

Signs that consumer price gains are slowing were augmented on Thursday by a report showing U.S. producer prices fell the most in seven months; however, the Fed has announced only a single and modest rate cut for the end of this year.

As for earlier reports of stockpile builds in the U.S., Tamas Varga, analyst at PVM, stated in a note that "The market reaction and the respectable advance in oil prices indicates that rising demand and the subsequent fall in the volume of oil stored worldwide is the question of when and not if.

"But just like the lowering of interest rates, it will come later than anticipated and the path higher will not be a straight line."

Meanwhile, despite claims from the International Energy Agency that oil in general had an extremely limited future due to the rise of EVs, the Organization of Petroleum Exporting Countries (OPEC) continued to express optimism on Thursday and supported prices by stating it expects demand to grow to 116 million barrels per day (bpd) by 2045, and possibly higher.

This flew in the face of the EIA predicting peak oil consumption of 105.6 million bpd by 2029 and supply capacity hitting nearly 114 million bpd by 2030, 8 million bpd above what it projected to be demand.

OPEC Haitham Al Ghais, secretary general of OPEC, said of ongoing rising demand, "Those that dismiss this reality are sowing the seeds for future energy shortfalls and increased volatility, and opening the door to a world where the gap between the 'energy haves' and 'energy have nots' grows even further."

In other oil news on Thursday, Russia banned domestic oil exporters and customs bodies from adhering to Western-imposed price caps on Russian crude, a decree that will be in effect until the end of this year; Moscow has repeatedly stated that almost all Russian oil is being sold above the cap.