Oil Prices Surge on Stronger US Demand
In a surprising turn of events, oil prices continued their upward trajectory on Thursday, fueled by signs of increased demand in the US. Data revealed that inflation in the US was slower than expected, prompting speculation of a potential interest rate cut that could boost consumer spending.
Brent Futures and US Crude on the Rise
Brent futures climbed 0.4 percent to $83.07 a barrel, while US West Texas Intermediate crude saw a similar increase, reaching $78.94. Market strategist Yeap Jun Rong noted that the recent US economic indicators could pave the way for rate cuts as early as September, leading to a surge in market expectations.
US Inflation and Retail Sales Impact Oil Prices
The subdued rise in US consumer prices for April has bolstered the case for a rate cut by the Federal Reserve, potentially lowering the value of the dollar and making oil more accessible to international buyers.
Inventory Drawdown and Geopolitical Tensions
A significant drop in US crude inventories and escalating tensions in the Middle East have contributed to the current oil price surge. The Energy Information Administration reported a decline in crude inventories, while geopolitical unrest in the region continues to create uncertainty.
Ceasefire Talks and Ongoing Conflict
Ongoing clashes between Israeli troops and Hamas militants in Gaza have stalled ceasefire negotiations, with both parties standing firm on their demands. The situation remains volatile, adding to the geopolitical risks impacting oil prices.
IEA Forecasts and Demand Growth
Despite the positive momentum, the International Energy Agency (IEA) revised its forecast for oil demand growth in 2024, citing weaker demand in developed nations. This adjustment has widened the gap between the IEA’s outlook and that of OPEC, potentially affecting future price trends.