WTI hovers near $73.50 with positive bias on revised EIA forecast on US oil production

West Texas Intermediate (WTI) oil price consolidates after recording gains over the previous two sessions, with the price hovering around $73.50 during the Asian session on Wednesday. The American Petroleum Institute (API) Weekly Crude Oil Stock showed improvement, recording a figure of 0.674 million barrels compared to the previous decline of 2.5 million barrels. However, this figure was significantly lower than the expected print of 2.133 million barrels for the week ending on February 2, providing support for Crude oil prices. Investors are now awaiting the release of the US Energy Information Administration (EIA) Crude Oil stockpiles report on Wednesday for further insights into the market.

The increase in Crude oil prices can be attributed to the United States (US) Energy Information Administration revising its forecast for growth in domestic oil production in 2024. The revised projection of 170,000 barrels per day (bpd) is lower than the previous estimate of 290,000 bpd, contributing to a more bullish outlook for oil prices.

According to the EIA Short-Term Energy Outlook (STEO), US Crude oil production is projected to increase to 13.21 million barrels per day (bpd) in the current year. Additionally, total petroleum consumption in the United States is anticipated to reach 20.4 million bpd in 2024 and 20.5 million bpd in 2025.

The potential for a ceasefire in the Israel-Gaza conflict has tempered the upward momentum of Crude oil prices. Hamas has reportedly responded to a proposed ceasefire plan put forward by Israel, the United States (US), Qatar, and Egypt. US Secretary of State Antony Blinken has indicated plans to discuss Hamas's response with Israeli officials on Wednesday. However, US President Joe Biden has expressed skepticism regarding the likelihood of Israeli agreement to Hamas's demands.