Back to the Blog Main Page
17/05/24
168
Crude Prices Flat; Weekly Gains Likely Due to Demand Hopes
On Friday, crude prices traded slightly higher and were set for a positive week as increased Chinese stimulus, shrinking U.S. inventories, and milder U.S. inflation fueled hopes of demand improving.
Brent oil futures were 0.1% higher at $83.29 per barrel and West Texas Intermediate crude futures were 0.1% higher at $79.28 per barrel.
Both contracts are on track to end the week with gains of between 1% and 0.5%, with most gains coming after the U.S. consumer inflation reading was softer than expected.
The April CPI reading pushed the dollar lower and fueled expectations that the Fed may start cutting rates in Sept., with easing monetary conditions bodes well for crude demand.
This was however offset by a slew of Fed officials saying that the central bank required more data to show that inflation was easing before it could start cutting rates.
Crude markets were this week also battling with mixed clues on demand. A larger-than-expected draw in U.S. inventories increased optimism over demand improving as the travel-heavy summer approaches.
This was however offset by the IEA reducing its annual demand forecast slightly as it cited uncertainty over the economy globally amid potentially high for longer rates and sticky inflation.
On the other hand, OPEC kept its demand forecast for next year unchanged as it cited potentially lower interest rates later this year and an eventual Chinese economic recovery.
Promotions
