Oil prices edged higher, buoyed by OPEC demand estimates and tensions in the Middle East

(1) Oil prices edged higher on Thursday as OPEC forecasted relatively strong global oil demand growth over the next two years, and the market was also focusing on the disruption of U.S. oil production due to a cold spell and geopolitical tensions in the Middle East. Brent crude futures are up 0.58% to trade at $78.34 a barrel, while U.S. crude is up 0.56% to trade at $73.23 a barrel. (2) Global oil demand is expected to increase by 1.85 million b/d to 106.21 million b/d in 2025, OPEC said in a monthly report. Demand in 2024 will rise by 2.25 million b/d, unchanged from last month’s forecast. (Full Story) (3) However, oil price gains were temporarily limited as market considerations were driven by mixed drivers. (4) Yeap Jun Rong, market strategist at IG, said: "As market participants grapple with the mixed supply and demand dynamics and the current geopolitical tensions, Brent crude oil prices remain broadly in a range as they have for the past two weeks. While the market remains wary of the geopolitical situation, the unexpected rise in U.S. crude inventories and the challenging recovery situation in large Asia continue to cloud the outlook for oil demand, Yeap said. (5) A senior intelligence official said on Thursday that Pakistan had launched attacks on Baloch militants in Iran. Iran launched an attack on the territory of Pakistan two days ago. (6) Meanwhile, North Dakota, a major U.S. oil-producing state, said sub-zero Fahrenheit (minus 18 degrees Celsius) temperatures have caused the state’s oil production to drop by 650,000-700,000 b/d, to less than half of its usual output. The U.S. government’s crude oil inventory data will be released at 0:00 Beijing time on Friday. According to the American Petroleum Institute (API), U.S. domestic crude inventories rose by 480,000 barrels last week. (7) International Energy Agency (IEA) Administrator Fatih Birol said at the Global Market Forum on Wednesday that despite tensions in the Middle East, the IEA expects the oil market to be in a “comfortable and balanced state” this year. (8) Yemen’s Houthi attacks on Red Sea vessels have forced many companies’ cargoes to detour Africa, increasing transportation time and costs. The United States on Wednesday launched a new round of strikes against Houthi targets inside Yemen in retaliation for its attacks on the shipping industry. The Houthis say their actions are in solidarity with Palestinians in Israel’s war with Gaza