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10/06/24
128
Crude Prices 2% Higher on Hopes of Higher Demand for Summer Fuel
On Monday, crude prices rose about 2% to a one-week high, bolstered by hopes of increasing fuel demand this summer despite the stronger U.S. dollar and anticipation that the U.S. Federal Reserve will keep interest rates higher for longer.
The higher rates increase borrowing costs for businesses and consumers, which can reduce demand for oil and slow economic growth.
Brent futures were $1.36, or 1.7% higher, at $80.98 per barrel, and U.S. West Texas Intermediate crude was $1.46, or 1.9% higher, at $76.99.
That put both crude benchmarks on target for their highest closing prices since May 31.
According to analysts at Goldman Sachs, Brent will likely rise to $86 per barrel in the third quarter. They said in a report that strong summer transport demand would push the oil market into a Q3 deficit of 1.3M.
The U.S. dollar gained to a one-month high versus a basket of other currencies as the euro dropped sharply due to European political uncertainty after gains by the far right in voting for the European Parliament led to French President Emmanuel Macron calling a snap national election.
Tamas Varga of oil broker PVM said the increase in crude prices began as the U.S. woke up and started the new week.
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