WASHINGTON (DTN) -- Nearby delivery oil futures on the New York Mercantile Exchange and Brent crude traded on the Intercontinental Exchange pushed higher in early trade Tuesday after International Energy Agency made no adjustments to its 2021 global oil demand outlook, projecting that bourgeoning gasoline and jet fuel consumption underpinned by the reopening of international air travel would offset renewed quarantine measures in the Northern Hemisphere and weakness in Asia's industrial production.
In its November Oil Market Report released this morning, IEA projected worldwide oil consumption would rise by 5.5 million barrels per day (bpd) this year -- unchanged from the previous' month forecast, despite concerns over expected demand weakness stemming from COVID-19 flare-ups across Europe. In 2022, the Paris-based agency estimates demand growth of 3.4 million bpd.
"Global oil demand is strengthening due to robust gasoline consumption and increasing international travel as more countries re-open their borders. However, new COVID-19 waves in Europe, weaker industrial activity and higher oil prices will temper gains," said IEA.
This week, a number of European countries resorted to targeted lockdowns in their attempt to slow the spread of the virus ahead of the winter months. Netherlands, Austria, and Russia have announced "stay-at-home" orders for the unvaccinated and limited hours of operations for contact sensitive businesses.
In contrast to the IEA outlook, Organization of the Petroleum Exporting Countries downgraded their global demand expectations for the fourth quarter by 330,000 bpd, projecting annualized growth of 96.7 million bpd. The cartel noted that there is no shortage of supplies on the global oil market amid rapidly weakening consumption in China and India.
At the annual energy conference at Abu Dhabi, Saudi oil minister Prince Abdul-Aziz bin Salman rejected calls for additional supplies from the kingdom, adding that "the issue is not lack of crude-oil, but it is a case for availability of gas, liquefied natural gas, coal and the electricity."
On Nov. 4, OPEC and Russia-led non-OPEC oil producers agreed to increase production quotas by 400,000 bpd for December, consistent with their July agreement, while shrugging off intense lobbying from the United States and other consuming countries for more volume of crude oil output.
In outside markets, U.S. Dollar Index ripped higher against a basket of foreign currencies as investors await the release of key economic data domestically, with expectations for October retail sales and industrial production to show a marked improvement from the prior month.
U.S. retail sales likely rose 1.1% in October, according to economists, underpinned by an early start to holiday shopping this year amid supply disruptions and delivery delays everywhere. If so, this behavioral change would likely pull forward some demand from the November-December holiday shopping towards October, artificially boosting the numbers. U.S. Census Bureau will release data on last month's retail sales at 8:30 a.m. ET.
Industrial production in October, to be released by the Federal Reserve at 9:15 a.m. ET, is expected to have increased 0.9% from a 1.3% decline in September, when Hurricane Ida disrupted the supply chain and factory activity in parts of the Southeast.
Near 7:30 a.m. ET, NYMEX West Texas Intermediate futures for December delivery added $0.55 to $81.49 per barrel (bbl), and the Brent contract for January advanced $0.78 to trade near $82.83 bbl. NYMEX RBOB December futures rallied 2.8 cents to $2.3572 gallon and front-month NYMEX ULSD futures surged 4.59 cents or 1.9% to $2.4437 gallon.
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