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18/07/24
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Crude Prices Higher as Economic Slowdown Signals Are Outweighed by US Rate-Cut Hopes
On Thursday, crude prices inched higher as increasing expectations that the Fed would cut interest rates soon, which may boost oil demand, outweighed worries about the economy slowing down which may hamper fuel consumption.
Brent futures were 20 cents higher at $85.28 per barrel. U.S. West Texas Intermediate (WTI) crude was 40 cents higher at $83.25 per barrel.
The number of Americans filing first-time applications for unemployment benefits last week increased by more than anticipated, while first-time claims for state unemployment benefits increased by 20K to a seasonally adjusted 243K for the week that ended on July 1.
The data bolstered the case for the Fed to speed up plans to cut rates, which may result in more spending on oil.
On Wednesday, Fed officials said the central bank was closer to reducing rates due to inflation’s improved trajectory and the labor market that was in better balance, potentially setting the stage for borrowing costs to be reduced in Sept.
From late May through early July, economic activity in the U.S. expanded slightly and firms expect slower growth ahead.
The rising jobless claims also indicated the economy was easing and this may cut into crude demand, and prevent oil prices from increasing.
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