Oil Prices Set for 3% Weekly Jump

24 Oct 2024 , 09:28 AM

After U.S. crude stocks increased far more than anticipated, oil prices recovered some of the more than 1% losses from the previous day and crept higher on Thursday.

While businesses saw an increase in hiring, overall economic activity in the United States remained relatively unchanged from September to early October. These recent developments have strengthened expectations that the Federal Reserve will choose to implement a smaller 25 basis point cut in borrowing costs in two weeks.

As markets continued to be concerned about supplies, a violent firefight between Israel and Hezbollah caused Brent crude prices to rise 44 cents, or 0.59%, to $75.40, while U.S. West Texas Intermediate crude futures jumped 45 cents, or 0.64%, to $71.22.

WTI was expected to increase 2.9% for the week, while Brent was expected to gain 3.2%. Concerns over Chinese demand and waning anxieties about possible interruptions to Middle Eastern oil supplies caused oil to drop more than 7% last week.

The U.S. Energy Information Administration reported on Wednesday that U.S. oil stocks increased by 5.5 million barrels last week, whereas analysts in a Reuters poll had predicted a 270,000-barrel increase.

Investors have recently retracted their bets on the amount and scope of U.S. rate cuts due to a series of better-than-expected economic statistics on inflation, job growth, and consumer spending.

Reduced borrowing costs will be tempered by smaller-than-anticipated rate decreases, which may have an impact on economic activity.

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