Oil Prices Surge on Weakening US Dollar and Inventory Data
Oil prices witnessed a significant rise on Wednesday, fueled by expectations of higher demand as the US dollar weakened. A report showing a decline in US crude and gasoline inventories added to the bullish sentiment, while the release of inflation data hinted at a more positive economic outlook, as reported by Reuters.
Brent Crude and US WTI Futures Soar
Brent crude futures surged by 0.6 percent, or 51 cents, reaching $82.89 a barrel by 9:30 a.m. Saudi time. US West Texas Intermediate crude futures also saw a rise of 0.7 percent, climbing 55 cents to $78.57 a barrel.
Inventory Data and Economic Outlook
The American Petroleum Institute reported a 3.104 million-barrel drop in US crude oil inventories for the week ending May 10. Gasoline inventories also fell by 1.269 million barrels, while distillates rose by 673,000 barrels. The upcoming US government inventory data is expected to show a further decrease in crude stockpiles as refineries ramp up production to meet summer driving season demand.
Impact of Consumer Price Index Data and China’s Stimulus Measures
The release of US consumer price index data on Wednesday will offer insights into potential interest rate cuts by the Federal Reserve, which could stimulate the economy and increase fuel demand. Oil prices were also supported by a weaker US dollar and China’s plans to issue 1 trillion yuan in long-term special treasury bonds to stimulate its economy.
Market Analysts’ Views and Concerns Over Canadian Oil Supply
Market analyst Tina Teng highlighted the importance of US CPI data and China’s economic indicators in influencing oil prices for the week. Concerns over Canadian oil supply arose as a massive wildfire approached Fort McMurray, a major hub for the country’s oil sands industry, which accounts for two-thirds of Canada’s total crude output.