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23/05/24
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Crude Prices Drop for Fourth Straight Time, Focus on US Demand
On Thursday crude prices dropped for the fourth straight session as the likelihood of higher-for-longer U.S. interest rates increased concerns about demand growth in the world’s largest oil consumer.
Brent crude oil futures were 45 cents, or 0.6% lower, at $81.45 per barrel and U.S. West Texas Intermediate (WTI) crude futures were down 57 cents, or 0.7%, at $77 per barrel.
Although data from S&P Global showed U.S. business activity accelerating in May, manufacturers reported prices for a range of inputs surging, indicating a pickup in goods inflation in the next few months.
Minutes from the U.S. Federal Reserve’s latest policy meeting released on Wednesday showed policymakers were still not sure if current interest rates were high enough to curb persistent inflation.
According to the Energy Information Administration, U.S. crude stocks rose by 1.8M barrels last week, versus an estimated draw of 2.5M barrels. This also weighed on the market.
The EIA however also reported U.S. gasoline demand was at the highest level since Nov., and this provided some support for energy markets.
Investors will also be watching the June 1 meeting of OPEC+, where the group will determine its output policy.
Russia said it had in April exceeded OPEC+ production quotas for technical reasons.
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