In a week fraught with anticipation, the global oil market remained on tenterhooks as investors closely monitored developments that could have far-reaching implications for the world economy and the energy sector.
On Tuesday, Brent crude futures barely budged, hovering just above the $90-a-barrel mark, as the world awaited a slew of macroeconomic data set to be unveiled later this week. The international benchmark, Brent, saw a minor dip of 6 cents, settling at $90.58 a barrel, while U.S. West Texas Intermediate (WTI) crude futures inched down by 2 cents to $87.27.
Decade high for brent
This steady performance comes after a notable milestone last week when Brent reached $90 a barrel for the first time in a decade, fueled by Saudi Arabia and Russia's decision to extend voluntary supply cuts by a combined 1.3 million barrels per day (bpd) until the year's end.
Investors were anxiously awaiting the release of industry data on U.S. crude stockpiles, scheduled for 2030 GMT on Tuesday. Preliminary data from a Reuters poll had suggested that crude inventories might have declined by approximately 2 million barrels during the week ending September 8.
CPI data
However, the spotlight was not solely on inventory numbers. All eyes were on the U.S. August Consumer Price Index (CPI) data due to be unveiled on Wednesday. This data was seen as a crucial determinant in gauging the likelihood of further interest rate hikes.
Adding to the intrigue, the European Central Bank was set to announce its interest rate decision on Thursday. This announcement came in the wake of the European Commission's forecast on Monday, which suggested that the eurozone's growth trajectory in 2023 and 2024 may be less robust than initially anticipated.
Energy reports on the horizon
In the energy sphere, the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) were poised to release their monthly reports this week, providing valuable insights into the future of the oil market.
The IEA had already lowered its forecast for oil demand growth in 2024 to 1 million bpd in the previous month, citing lackluster macroeconomic conditions. Conversely, OPEC's August report had maintained its demand growth forecast for 2024 at 2.25 million bpd, setting the stage for potential divergence in the expectations of two influential players in the global oil landscape.
Awaiting the unfolding saga
As the week progresses, the energy market will continue to watch these developments closely, with the fate of oil prices hanging in the balance, intertwined with the broader economic and geopolitical landscape.
For now, the energy sector remains in a state of anticipation, with oil prices poised to respond to the impending deluge of data and policy decisions that will shape the future of the industry.
