The prices of the Petroleum rose on Thursday, with Brent crude above $85 a barrel, amid increased expectations of interest rate cuts in USA, following data showing an unexpected slowdown in the inflation.
The Brent futures rose 32 cents, or 0.38%, to $85.40 a barrel, while crude oil West Texas Intermediate in the United States (WTI) gained 52 cents, or 0.63 percent, to $82.62.
This echoed what happened in the US, where consumer prices fell in June, which raised hopes that the Federal Reserve interest rate cuts soon. After the data came out, traders put the probability of a cut in September at 89%, compared with 73% on Wednesday.
Slowing inflation and interest rate cuts will likely spur greater economic activity, analysts say. Growmark Energy.
The data brought down the dollar index and that should support prices of Petroleum, said Gary Cunningham, director of market research at Tradition Energy. A weaker dollar may boost demand for oil, which is traded in the U.S. currency.
The demand for oil
On the other hand, in its latest monthly report on the oil market, the IEA placed global demand growth at its lowest level in more than a year, with 710,000 barrels per day (bpd) in the second quarter, driven mainly by the contraction in consumption in China.
The growth forecast of the global demand for Petroleum The IEA’s 2024 forecast was kept virtually unchanged at 970,000 bpd, while the 2025 forecast was cut by 50,000 bpd to 980,000 bpd.
In its monthly report on Wednesday, the OPEC kept its global oil demand growth forecasts for this year and next unchanged at 2.25 million bpd and 1.85 million bpd respectively.
Both Brent and WTI contracts rose on Wednesday, breaking a three-day losing streak, after a report from the Energy Information Administration (EIA) show a drop in crude oil and gasoline stocks in USA.
“The rebound is largely due to the continued drawdown of U.S. inventories, the EIA reported,” said Suvro Sarkar of DBS Bank to Reuters.
On the other hand, the day will be published the Consumer Price Index (CPI) of USAwhich could offer new clues about the health of demand. The Producer Price Index will be published on Friday.
Source: Ambito
