Oil prices rise

17 May 2024 , 08:41 AM

Friday’s Asian trading hours saw an uptick in oil prices, with global benchmark Brent expected to rise for the first time in three weeks due to increasing global demand and a slowdown in inflation in the United States, the world’s largest oil user.

The price of a barrel of Brent crude oil  increased by 21 cents, or 0.3% to $83.48. At $79.41 per barrel, U.S. West Texas Intermediate (WTI) oil futures increased by 18 cents, or 0.2%.

WTI futures are expected to gain 1.4% weekly, while Brent futures are expected to advance by roughly 1%.

Reversing a trend of building stocks that had put a significant pressure on crude oil prices in previous weeks, recent decreases in oil and refined product inventories at major global trading hubs have raised optimism about the expansion of oil demand. Brent crude futures were down almost 10% as of Thursday from the peak of $92.18 per barrel on April 12 of this year.

While Singapore’s middle distillate fuel stocks plummeted to an almost three-month low this week, U.S. oil and fuel inventories decreased this week. According to statistics from consulting firm Insights Global, petrol stocks in Europe’s major trading hub of Amsterdam, Rotterdam and Antwerp fell 7.5% in the week ending on Thursday.

The recent U.S. economic data has contributed to the confidence regarding global demand. According to data released on Wednesday, U.S. consumer prices increased less than anticipated in April, which raised hopes for a reduction in interest rates in the nation.

Data released on Thursday indicated that the U.S. labour market was beginning to stabilise, which raised even more optimism.

Reduced interest rates may contribute to the depreciation of the US dollar, lowering the price of oil for foreign currency holders and increasing demand.

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