WTI recovers gorund to the $81.30s
- West Texas Intermediate crude oil recovers in late trade for the lows of the day.
- Oil prices are under pressure as markets discount the most likely course of action.
West Texas Intermediate crude oil has risen on the day and trades around 0.4% higher into the close on Wall Street. The black gold rallied from a low of $80.23 to a high of $82.29 on the day. The black gold has recovered from the day's lows which were printed after OPEC lowered its 2021 demand forecast on weaker than expected demand from China and India.
OPEC has cut its demand forecast by 0.16-million barrels per day from its October estimate its monthly report showed. OPEC now sees global demand this year reaching 96.4-million bpd, rising to 100.6-million bpd in 2022. Meanwhile, its forecast for supply outside the cartel was unchanged at 63.6-million bpd this year and 66.7-million bpd in 2022.
US inflation worries investors
In other themes, US inflation has concerned investors. US Consumer Price Index came in the strongest increase in some 30 years and energy prices will be a top priority for the White House. On Wednesday reported inflation rose to the highest since 1990, with higher energy costs the largest contributor to the 6.2% annualized rise in prices. Higher inflation is increasing pressure on the Biden Administration to release oil from the country's strategic reserves to bring down the price of oil and gasoline.
''Energy prices are under pressure as markets discount the most likely course of action, which would involve a release of SPR crude,'' analysts at TD Securities explained. ''This follows the EIA's Short Term Energy Outlook, which rather pointed to an oversupplied market in 2022. Yet, a continued recovery in demand is expected as global economies exit the pandemic, which can fuel strong short-term performance as OPEC pursues a rather cautious approach, ignoring calls to hike output at a faster pace.''