MARKETWIRE ALERTS

MARKETWIRE ALERTS 

MarketWire Afternoon News for February 27th:

Updated at 5:00 PM ET 

HEADLINES:

— Analysis: Oil Demand Growth May Beat Forecasts in 2026

— Baker Hughes: North America Rig Count Down 11 on Week

— BLS: US PPI Rises 0.5% in Jan. on Higher Services Prices

NEWS:

Analysis: Oil Demand Growth May Beat Forecasts in 2026

Global economic data showed an uptick in December that could continue, potentially altering the demand dynamics for the oil market which could see a softer landing versus the profoundly bearish picture anticipated earlier.

While many forecasting agencies predict a sizable oversupply for 2026, recent macroeconomic releases are beginning to challenge this bearish demand sentiment due to improving demand statistics from the East to West.

This year’s anticipated crude price drop – the U.S. Energy Information Administration’s Short Term Energy Outlook for February forecasts an average 2026 WTI price of $53.42 bbl versus the 2025 average of $65 – could also shift from evolving demand.

Aside from the tensions over Iran that drove WTI to seven-month highs of more than $67 bbl this week, steady economic growth could underpin the demand required to keep oil above the price lows forecast for this year.

Manufacturing Rebound

Most models previously predicted minimal growth in petroleum fuel consumption for the U.S. and Europe due to engine efficiency gains and increasing use of biofuesl and electric vehicles. However, recent manufacturing data revealed a surprising pickup in activity that could counteract the expected decline in diesel and gasoline demand.

The Institute for Supply Management’s latest U.S. manufacturing PMI showed the sector expanded in January at its fastest pace since 2022. This reading surpassed the 50-point mark for the first time in a year, signaling a definitive shift from contraction to expansion.

The Federal Reserve, meanwhile, reported that U.S. industrial output increased 2.3% year-on-year in January, the strongest annual expansion in close to four years.

Elsewhere in the West, the Eurozone manufacturing PMI rebounded to 50.8 in February, marking the strongest improvement for the region since June 2022. Business sentiment reached a four-year high as new orders increased at the fastest pace seen in nearly four years.

Global trade forecasts are also shifting after the U.S. Supreme Court struck down the administration’s use of emergency powers regarding high tariffs. The replacement of these tariffs with a flat 10% fee may reduce the trade strains previously baked into demand models. Lower trade barriers typically stimulate global shipping and freight activity, directly boosting demand for middle distillates and bunker fuels used in international commerce.

Asian Momentum

Leading petroleum demand in Asia was China, where factories picked up steam at the end of last year, boosting industrial production 5.2% year-on-year in December for the fastest growth since September.  The RatingDog (formerly Caixin) manufacturing PMI also regained momentum from below 50 in November to reach 50.1 in December and 50.3 in January.

Prior to that, the Chinese economy had struggled to definitively break from the prolonged pandemic induced shutdown. High levels of debt, lacking fiscal stimulus and slowing demand growth in its largest export markets hit the brakes on Chinese growth long before the resumption of its trade war with the U.S. following the reelection of Donald Trump as president.

Chinese crude oil imports and refining activity surged to record highs in 2025 after a brief retreat during the previous year.

Sans Chinese growth which once dominated Asia and much of the world, India has taken the spot of the fastest-expanding major economy, with annual growth in industrial production at a two-year high of 7.9% in December. India’s National Statistics Office has also revised GDP growth projections higher to a range of 7% to 7.4% for the 2026/27 period, from a prior 6.8% to 7.2%.

That’s not all. Modelers expect Asian economies excluding China and India to drive a substantial portion of global demand growth through the next two years. OPEC attributes a fifth of global growth to these nations, calling for a 270,000 bpd increase.

Despite the higher demand, global supply additions are still poised to outpace even the most bullish forecasts due to unexpected price rises. Global inventories will likely continue to swell, though the pace may be much slower than the current consensus suggests.

Baker Hughes: North America Rig Count Down 11 on Week

North American energy drilling activity fell by 11 rigs this week, after the prior week’s two-rig climb, according to Baker Hughes’ weekly rig count report released Friday (2/27).

The report showed the regional rig count at 754 in the current week, versus 775 the week prior. Year-over-year, rigs for Canada and the U.S. combined were down 77 from the 841 actively deployed in the same week of 2025.

As with the recent trend, this week’s change was driven almost entirely by Canada, where the rig count fell by 10 to stand at 214, from a prior 224.  Eight of the rigs that Canada lost were in oil drilling while the balance two were in gas.

The U.S. rig count itself fell by one to 550. Land-based U.S. rigs rose by one to 531 but offshore rigs and inland-water rigs both dipped by one each, to 531 and 17, respectively. That left the net U.S. count down by one.

By trajectory, horizontal rigs and directional rigs in the U.S. were both unchanged while vertical rigs dipped by one to 13. Year-over-year, the U.S. rig count was lower by 43 from the 593 actively deployed a year ago.

BLS: US PPI Rises 0.5% in Jan. on Higher Services Prices

The Producer Price Index (PPI) for final demand advanced 0.5% in January, following a 0.4% increase in December and 0.2% in November, the U.S. Bureau of Labor Statistics (BLS) reported Friday (2/27).

The January increase was led by a 0.8% rise in prices for final demand services. Most of that increase can be traced to a 2.5% jump in margins for final demand trade services, BLS said. The index for final demand goods prices, in contrast, declined 0.3%.

Market consensus expected a 0.3% increase in January, but a 2.5% month-on-month jump in trade costs and a 0.3% rise in core producer prices—final demand excluding food, energy, and trade—outweighed lower goods prices.

Year-on-year, PPI for final demand was up 2.9% in January versus 3% in December and against a market consensus of 2.6%.

Core PPI for final demand, which strips out volatile food and energy components as well as trade services, rose 0.3% in January after growing 0.4% in December. Over the past 12 months, this core measure has increased 3.4% on an unadjusted basis.