Unexpected Inventory Data Triggers Gradual Rise in Oil Prices

7 Mar 2024 , 10:56 AM

Following significant decreases in fuel supplies and a less-than-expected increase in U.S. crude inventories last week, oil prices increased little on Thursday.

U.S. West Texas Intermediate crude prices increased by 18 cents to $79.31 a barrel, while Brent crude futures increased by 15 cents to $83.11 a barrel.

The benchmarks gained almost 1% on Wednesday as a result of the sixth consecutive week of rising crude stockpiles, which increased by 1.4 million barrels, or roughly two-thirds of the 2.1 million-barrel increase that analysts had predicted in a Reuters poll.

The EIA report also revealed that gasoline and distillate stockpiles decreased more than anticipated.

According to a Reuters survey of foreign exchange strategists, a strong dollar will sustain the status quo in the near term as markets prepare for the possibility that the U.S. Federal Reserve’s first interest rate drop will be postponed until the second half of this year.

Even if the US central bank still plans to lower its benchmark interest rate this year, Fed Chair Jerome Powell stated that further progress on the issue of inflation “is not assured”.

Additionally, markets expected Chinese trade statistics. Beijing announced this week that it is once more targeting a 5% GDP growth this year. However, a lot of analysts are dubious, and the way imports and exports have performed recently indicates that trade won’t be a significant economic driver.

Top oil exporter Saudi Arabia increased the price of its trademark Arab Light crude, which it supplies to Asia, to $1.70 per barrel in April, above the Oman/Dubai average, according to trade sources, indicating a shortage of supply.

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