Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Please try again

Live Webinar Events


Economic Calendar Events


Notify me about

Live Webinar Events
Economic Calendar Events






More View More
Crude Oil Latest: Trend Higher Still in Place Despite IEA Cutting Forecast For Demand

Crude Oil Latest: Trend Higher Still in Place Despite IEA Cutting Forecast For Demand

What's on this page

Crude oil price, news and analysis:

  • The International Energy Agency has cut its forecasts of oil demand by 600,000 barrels per day for the first quarter of 2021 and by 300,000 for this year as a whole.
  • It argues that a resurgence in coronavirus cases is slowing the rebound in demand.
  • However, prices of both US crude and Brent continue to trend higher and for US crude the $55/barrel level is now in focus.

IEA cuts crude oil demand forecasts

The International Energy Agency, in its latest monthly oil market report, has lowered its forecasts of global oil demand by 300,000 barrels per day for this year, with the cut focused on the first quarter when the IEA has lowered its forecast by 600,000 bpd.

The IEA blames the resurgence in Covid-19 cases and fresh lockdowns, which it says are slowing a rebound in demand. However, this was largely ignored by the markets, with US crude continuing to climb within the upward channel on the charts in place since the recent low of just above $34 was reached on November 1 last year.

US Crude Oil Price Chart, Daily Timeframe (September 29, 2020 – January 19, 2021)

Latest US crude oil price chart.

Source: IG (You can click on it for a larger image)

Oil Forecast
Oil Forecast
Recommended by Martin Essex, MSTA
Download our fresh Q1 oil forecast
Get My Guide

As the chart shows, a continuing climb would bring the $55/barrel level into focus, and that would be no surprise given market optimism that coronavirus vaccines will bring the pandemic under control. Note too that the Chinese economy grew by more than expected in the fourth quarter, with the GDP growth rate at 6.5% year/year.

There is also optimism that a large US stimulus package is on the way, with former Federal Reserve Chair Janet Yellen – proposed as the next US Treasury Secretary – to tell a Senate confirmation hearing that there is a need to “act big”.

Find out here how to become a better trader

Note also that fuel demand concerns remain but the IEA said that “the global vaccine roll-out is putting fundamentals on a stronger trajectory for the year, with both supply and demand shifting back into growth mode... But it will take more time for oil demand to recover fully as renewed lockdowns in a number of countries weigh on fuel sales.”

Oil - US Crude Bearish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 6% -8% -2%
Weekly 11% -24% -11%
What does it mean for price action?
Get My Guide

We look at commodities regularly in the DailyFX Trading Global Markets Decoded podcasts that you can find here on Apple or wherever you go for your podcasts

--- Written by Martin Essex, Analyst

Feel free to contact me on Twitter @MartinSEssex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.