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Oil: ‘Seeing a little bit of a decrease in terms the demand outlook from OPEC’

Oil is having a huge year. Yahoo Finance's Emily McCormick breaks down the latest.

Video Transcript

JARED BLIKRE: Welcome back. Time now for a check of the energy market where WTI for December futures, that just settled at $81.59 per barrel. And we want to bring in Yahoo Finance's Emily McCormick to break down the day's price action and just about unchanged for the day, Emily, and not only in the week, but we did have some action today and this week in the oil patch, so just kind of break it down for us here, please.

EMILY MCCORMICK: Well, absolutely, Jared. So as you mentioned, not a huge move today in crude oil. That West Texas intermediate crude oil future settling just slightly higher by less than 0.5% on the day to reach $81.59 a barrel. US crude oil prices are heading for a just marginal weekly gain after last week's almost 3% decline, so at least a little bit of a reversal on that front. And Brent crude, the international standard, is also just marginally higher on the day.

Now, just a couple of headlines coming out from OPEC Plus earlier that I do want to highlight here. The alliance slashed its forecast for crude oil demand for this year by 160,000 barrels per day. It now expects global oil demand to average 96.4 million barrels per day this year. So, again, seeing a little bit of a decrease in terms of the demand outlook from OPEC Plus. And a big reason for this is because of slower than expected demand from major global energy consumers, including China and India, which are, of course, still grappling with the pandemic as well.

So that headline and expectations for slightly lower demand could maybe be capping prices today after that decline that we saw yesterday, because we did see that pretty notable 3% decline in US crude oil futures just yesterday. And that was after new inflation data, of course, had showed a market rise in the energy component of the consumer price index out from the BLS. And we saw fuel oil specifically was up 12.3% on the month in terms of prices. And the inflation data as a whole definitely still pointing to persistently elevated price pressures across the economy, and certainly with oil and other fuel prices as well.

Now that in turn has sparked concerns that the jump in prices may spur a Fed move, which would also impact the dollar and oil prices. And President Joe Biden had said in a statement at the time after yesterday's CPI print that reversing inflationary trends was a top priority for him. So, not a lot of action today on the crude oil front or in the energy markets, but certainly something we've been tracking over the past couple of days and year to date, of course, Jared.

JARED BLIKRE: That's right. And just digging into those CPI numbers from yesterday, fuel oil up 60% year over year. Absolutely incredible. Yahoo Finance's Emily McCormick, thank you for that report.

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