Oil Prices Surge on Larger-Than-Expected Decline in US Crude Stocks
In a thrilling turn of events, oil prices continued their upward trajectory on Thursday, fueled by a significant drop in crude stocks in the US – the world’s top oil consumer. Brent futures saw a surge of 58 cents, reaching $85.66 a barrel, while US West Texas Intermediate crude climbed 75 cents to $83.60.
US Inventory Data Surprises Analysts
The latest data from the US Energy Information Administration revealed a surprising decline of 4.9 million barrels in US crude inventories last week, surpassing analysts’ expectations of a mere 30,000 barrel decrease. This unexpected turn of events has sent shockwaves through the oil market.
Market Analysts Remain Optimistic
Market analyst Priyanka Sachdeva from Phillip Nova expressed confidence in the oil market’s resilience, citing strong demand signals from the US. Despite concerns over slow Chinese growth, the current summer travel season and hopes for a Federal Reserve easing are driving oil demand in the world’s largest economy.
Interest Rate Cuts on the Horizon
The possibility of interest rate cuts in the US and Europe has added further support to the oil market. Federal Reserve officials hinted at a potential rate cut in September, while the European Central Bank signaled a future reduction in interest rates. These developments have investors on edge as they await policy news from China’s leadership gathering.
Weaker Dollar Boosts Oil Demand
To add to the excitement, the dollar weakened for the third consecutive session, potentially increasing demand for oil. A weaker dollar makes oil more affordable for holders of other currencies, leading to a surge in demand for greenback-denominated commodities like oil.