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James Hyerczyk
WTI and Brent Crude Oil

U.S. West Texas Intermediate and international-Benchmark Brent crude oil futures are edging higher on Tuesday despite worries over a slow recovery in global fuel demand. Traders attributed the move to short-covering ahead of a meeting later this week of OPEC and its allies, known as OPEC+.

At 08:53 GMT, December WTI crude oil is trading $38.22, up $0.23 or +0.61% and December Brent is at $40.49, up $0.21 or +0.52%.

Meanwhile, major oil industry producers and traders are forecasting a bleak future for worldwide fuel demand, due to the pandemic’s ongoing assault on the global economy, with OPEC downgrading its oil demand forecast and BP citing demand might have peaked in 2019.

World oil demand will tumble by 9.46 million barrels per day this year, the Organization of the Petroleum Exporting Countries said in a monthly report, more than the 9.06 million bpd decline expected a month ago.

IEA Cuts 2020 Oil Demand Forecast

The International Energy Agency on Tuesday cut its forecast for 2020 oil demand growth, citing a “treacherous” path ahead amid weakening market sentiment and an upsurge in the number of coronavirus cases reported across the globe.

In a closely-watched monthly report, the IEA trimmed its outlook for worldwide oil demand growth to 91.7 million barrels per day. That marks a contraction of 8.4 million bpd year-on-year, more than the 8.1 million bpd contraction predicted in the Paris-based energy agency’s August report.

“We expect the recovery in oil demand to decelerate markedly in the second half of 2020, with most of the easy gains already achieved,” the IEA said.

“The economic slowdown will take months to reverse completely, while certain sectors such as aviation are unlikely to return to their pre-pandemic levels of consumption even next year.”

For a look at all of today’s economic events, check out our economic calendar.
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