April 17, 2024
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Oil Prices Rise Due to Growing Demand By World’s Top Consumers

Oil prices went up on Friday, as world top consumers, the United States and China, boost demand for the product. While the U.S. Federal Reserve gave a positive signal on the possibility of rate cuts.

Brent crude futures were up 0.6%, or 49 cents, at $83.45 a barrel by 0415 GMT. U.S. West Texas Intermediate crude futures rose 0.7%, or 60 cents, to $79.53. Both contracts were down slightly on the week so far, however, with Brent and WTI down 0.1% and 0.5% respectively.

Data from the Energy Information Administration, showed that US gasoline inventories and distillate stockpiles, fell more than expected, in a sign of a strong demand. The latter fell fell 4.5 million barrels last week, while the former, fell 4.1 million barrels. As gathered by Reuters.

“With the U.S. driving season just on the horizon, the market could get even tighter in coming weeks,” ANZ Research said in a note.

In the first two months of the year 2024, imports of crude oil rose 5.1% in China. And India’s fuel consumption increased 5.7% in February in the year, despite strong factory activity in the world’s third-biggest oil importer and consumer.

Capital Economics said in a note, that crude oil imports in China were up 3.3% in annual terms on the 29th of February.

“But that growth will be substantially lower than in 2023, when the end of zero-COVID restrictions led to a surge in activity in transport and travel,” the note added.

The U.S. central bank is “not far” from gaining enough confidence that inflation is falling sufficiently to begin cutting interest rates, noted Jerome Powell, Federal Reserve Chair.

“Weakness in the U.S. dollar may have offered some support thus far, as Powell’s comments seem to fall short of the hawkishness that was initially expected,” said Yeap Jun Rong, a market strategist at IG.

TC Energy’s,  Keystone oil pipeline in Canada have resumed service on Thursday after temporarily a major supply of Canadian oil to the US, one of the reasons for the rise in prices.

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