Oil edges higher as petroleum demand set to touch record next year

Oil prices edged slightly higher on Tuesday as the U.S. government forecast record global petroleum consumption next year and as the dollar hovered at seven-month lows.

Global consumption of liquid fuels is forecast to reach 102.2 million barrels per day in 2024, driven primarily by growth in countries like India and China, reflecting trends in economic activity, the U.S. Energy Information Administration said in its Short-Term Energy Outlook.

Brent futures rose 45 cents or 0.6%, to settle at $80.10 a barrel, while U.S. crude ended 49 cents, or 0.6% higher at $75.12 per barrel.

Markets also awaited clarity on the U.S. Federal Reserve’s plans to raise interest rates after Fed Chair Jerome Powell avoided comments on monetary policy and the economy at a symposium. Traders are now looking to U.S. CPI data on Thursday for indications on the near-term outlook.

Thursday’s data “could easily clarify the direction of the financial and oil markets for weeks to come”, said Tamas Varga of oil broker PVM.

He said the dollar would fall if inflation came in below expectations or was below the November reading, Varga added.

The dollar hovered around its weakest level in seven months. A weaker dollar can boost demand for oil, as greenback-denominated commodities become cheaper for holders of other currencies.