Oil tumbles on profit-taking after hitting $85

15 Mar 2024 , 01:03 PM

Although oil prices somewhat decreased on Friday, they were still expected to rise by almost 4% this week due to several factors, including dramatic drops in U.S. fuel and crude supplies, drone attacks on Russian refineries, and higher-than-expected estimates for energy consumption.

May Brent crude oil futures slid 41 cents, or 0.5%, to $85.01 a barrel on Thursday, following their first close above $85 a barrel since November. West Texas Intermediate (WTI) oil for the United States dropped 32 cents, or 0.4%, to $80.94 in April.

For the fourth time since November, the International Energy Agency upgraded its forecast for the growth of the oil demand in 2024 on Thursday after Houthi attacks impeded transportation across the Red Sea.

1.3 million barrels of oil will be consumed globally in 2024, according to the IEA’s most recent assessment, an increase of 110,000 barrels from the previous month. After OPEC+ members extended cutbacks, it predicted a minor supply deficit this year as opposed to a surplus last year.

A second day of intense drone assaults by Ukraine against Russian oil refineries supported oil prices as well. On Wednesday, the largest refinery owned by Rosneft caught fire, marking one of the worst attacks against Russia’s energy industry in recent memory.

According to the Energy Information Administration (EIA) on Wednesday, U.S. crude oil stockpiles unexpectedly decreased last week as refineries increased processing, while petrol inventories plummeted as demand increased.

When it rolls over maturing medium-term loans on Friday, China’s central bank is anticipated to maintain a key policy rate unaltered, according to a Reuters survey.

Reduced interest rates save consumers’ borrowing expenses, which can increase demand for oil and spur economic growth.

A larger-than-expected gain in producer prices last month was indicated by other statistics released on Thursday, suggesting that the Federal Reserve in the United States was unlikely to start lowering interest rates until June despite some indications of slowing economic activity.

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