Oil Prices Rebound as Investors Analyze US Inventory Data
After two days of decline, oil prices inched up on Thursday as investors reevaluated the latest data on US crude oil and gasoline inventories. According to Reuters, buyers returned to the market, pushing prices higher.
Brent crude futures for May saw a 0.4 percent increase, reaching $86.40 a barrel, while the June contract rose to $85.73. US West Texas Intermediate crude futures for May delivery also went up by 0.50 percent, hitting $81.74 a barrel.
Both benchmarks were set to end the month higher for the third consecutive time, with a 4.5 percent increase from the previous month.
Despite the unexpected rise in US inventories last week, driven by increased crude imports and weak gasoline demand, oil prices faced pressure in the prior session. However, the increase in crude stocks was lower than what was projected by the American Petroleum Institute.
Analysts like Bjarne Schieldrop from SEB Research believe that the global oil market is in a slight deficit, leading to lower-than-normal inventory rises in the US. This could provide support for Brent crude oil prices in the future.
Additionally, the rise in US refinery utilization rates last week and the expectation of lower interest rates from the US Federal Reserve and the European Central Bank also supported oil prices.
Looking ahead, investors are keeping an eye on the upcoming meeting of the Joint Monitoring Ministerial Committee of OPEC next week. Concerns over geopolitical risks and the possibility of members not adhering to current production quotas could impact oil prices.
Despite the ongoing tension in the Middle East, particularly between Israel and Hamas, OPEC+ is unlikely to make any changes to oil output policies until June. Any indication of members not sticking to production quotas could be viewed negatively by the market, according to ANZ Research analysts.