Oil prices rise in early trade

27 Jul 2023 , 11:34 AM

Oil prices increased on Thursday as investors concentrated on anticipations of tighter supplies from major oil producers, reversing previous declines brought on by concerns that the U.S.’s increase in interest rates would hamper demand.

The second-largest oil user in the world, China’s promise of economic stimulus, also supported the market.

Brent crude futures were up 36 cents, or 0.4%, at $83.28 a barrel, while WTI crude in the US was up to $79.26, up 48 cents, or 0.6%.

The Federal Reserve boosted interest rates by a quarter of a percentage point on Wednesday, leaving room for another increase. Data revealed that U.S. oil stocks dropped less than anticipated.

On Thursday, the European Central Bank is also anticipated to increase interest rates for the ninth time in a row. However, this may not mark the end of the ECB’s ongoing policy tightening due to the continued rise in inflation.

Oil prices have increased for the past four weeks on the back of indicators of tighter supply, which are mostly attributable to Saudi Arabia and Russia cutting their output, as well as Chinese government commitments to support the world’s second-largest economy.

For feedback and suggestions, write to us at [e-mail]