Crude Oil Futures Hold Steady Amid Improving Demand and Falling Inventories
In a world where uncertainty reigns supreme, crude oil futures managed to hold their ground on Friday, showing signs of resilience amidst a tumultuous market. With demand on the rise and oil and fuel inventories in the US, the largest oil consumer globally, in decline, the stage was set for a potential second week of gains.
Brent Futures See Slight Dip, But Hold Strong at $85.56
Brent futures for August settlement saw a minor dip of 15 cents, settling at $85.56 a barrel by 6:56 a.m. Saudi time. Despite this slight decrease, the previous session saw a rise of 0.8 percent, showcasing the underlying strength in the market.
US West Texas Intermediate Crude Futures Show Resilience
US West Texas Intermediate crude futures for August delivery held their own, showing a marginal decrease of 14 cents to $81.15 per barrel. The previous session saw the July contract expiring at $82.17 a barrel, up by 0.7 percent.
Price Strength Continues to Surge as Demand Rises
With prices climbing approximately 5 percent since the beginning of the month, reaching levels not seen in over seven weeks, analysts are optimistic about the future. Citi analysts pointed to seasonal demand increases, geopolitical tensions, and the upcoming hurricane season as factors that could sustain this price strength into the summer.
US Government Data Shows Positive Signs for Demand
US government data released on Thursday painted a positive picture for demand, with total product supplied rising by 1.9 million barrels per day to 21.1 million bpd. Additionally, crude stockpiles in the US saw a drawdown of 2.5 million barrels, exceeding analysts’ expectations.
Global Demand Prospects and Economic Indicators Impact Prices
Demand prospects in Asia also played a role in pushing prices higher, with signs of stronger demand in the region. However, US data showing a decline in new unemployment claims may lead to the Federal Reserve keeping interest rates unchanged, potentially limiting economic growth and oil demand.