Oil prices rose on Wednesday, supported by the International Monetary Fund’s (IMF) optimistic global inflation forecasts and the resurgence in Chinese demand. The international benchmark, Brent crude, traded at $85.80 per barrel at 9.54 a.m. local time (0654 GMT), a 0.22% increase from the previous trading session’s closing price of $85.61 a barrel.
West Texas Intermediate Sees Gains
At the same time, the American benchmark West Texas Intermediate (WTI) traded at $81.67 per barrel, marking a 0.17% rise from the previous session’s closing price of $81.53 a barrel.
IMF’s Positive Global Economic Recovery Forecast
The IMF’s World Economic Outlook report, titled “A Rocky Recovery,” contributed to the bullish market sentiment by stating that the global economic recovery is ongoing despite challenges. The report also highlighted China’s rapidly reopening economy and easing supply chain disruptions.
API Estimates Affecting Crude Oil Prices
The American Petroleum Institute (API) announced late Tuesday its estimate of a rise of over 377,000 barrels in US crude oil inventories, in contrast to the market expectation of a 1.3-million barrel fall. An increase in inventory typically indicates a decrease in crude demand in the US, alleviating concerns over falling demand.
IMF Lowers Global Economic Outlook
While the IMF lowered its outlook for the global economy, it predicted that most countries would avoid a recession this year despite economic concerns and geopolitical strains. The global economy is expected to grow by 2.8% in 2023 and 3% in 2024, a decline of 0.1 percentage point from the IMF’s January forecasts.