On Monday, crude oil futures saw a surge in prices, reaching their highest levels in a week. OPEC’s latest monthly market report played a vital role in allaying concerns about weakening demand in the global oil market.
OPEC expressed its optimism by forecasting a 2.5M bbl/day increase in oil demand for this year, marking a 100K bbl/day rise from the previous month’s report. The organization attributed this bullish sentiment to better-than-expected growth in the U.S. and China.
Last week, disappointing economic data from leading crude importer China had triggered worries about demand, prompting Chinese refiners to request reduced supply for December from Saudi Arabia. However, the OPEC report contradicted this, asserting that Chinese demand remains “healthy,” with crude imports soaring by 240K bbl/day compared to September.
In October, Iran’s output surged by 46K bbl/day, elevating its production to 3.12M bbl/day, as per OPEC’s findings.
In response, front-month Nymex crude (CL1:COM) for December delivery closed at +1.4%, settling at $78.26/bbl. Similarly, front-month January Brent crude (CO1:COM) concluded at +1.3%, reaching $82.52/bbl—both reflecting their highest settlement values since November 6.
Among ETFs affected by these developments are (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), and (USOI).
According to a Reuters report, Iraq’s oil minister expects to finalize an agreement that would resume oil production from the Kurdish region within a few days.
Should the Iraq-Turkey pipeline reopen for oil exports, it would reintroduce 450K bbl/day of crude oil into the market, as highlighted by StoneX’s Alex Hodes. This development, after remaining offline since March, is anticipated to ease crude tightness, constituting a bearish announcement during a period of fading crude oil prices, as stated by Hodes.