Crude Oil Futures Dip

21 Jun 2024 , 09:58 AM

Crude oil futures declined in early trade on Friday due to the likelihood of prolonged high interest rates in Asia and the United States. However, a drop in U.S. oil inventories prevented prices from falling further.

Market Performance

• Brent Futures for August Delivery: Down 11 cents to $85.60 per barrel by 0013 GMT.
• U.S. Crude: Down 9 cents to $81.20 per barrel.

Economic Indicators

• Japan’s Inflation: Core consumer prices in Japan rose 2.5% in May compared to a year earlier, indicating a potential for higher interest rates from the central bank in the coming months.
• U.S. Employment Data: Data released on Thursday showed a decrease in new unemployment claims for the week ending June 14, highlighting a strong job market. This strengthens the possibility of the U.S. Federal Reserve maintaining higher interest rates for an extended period.

Higher interest rates often slow down economic activity, which can reduce oil demand.

U.S. Oil Inventory Report

• Crude Stockpiles: U.S. crude stockpiles fell by 2.5 million barrels to 457.1 million barrels in the week ending June 14, according to the Energy Information Administration (EIA).
• Gasoline Inventories: Gasoline stocks decreased by 2.3 million barrels to 231.2 million barrels, contrary to expectations of a 600,000-barrel increase.