Oil prices continue decline despite signs of stronger demand

May 16, 2024 (MLN): Oil prices slipped further on Thursday despite slower than expected US inflation in April and lower oil stocks last week.

Brent crude traded near $82.52 per barrel, down by 0.28% on the day.

While West Texas Intermediate crude (WTI) was at $78.2 per barrel, down by 1.34% on the day.

U.S. crude oil, gasoline and distillate inventories fell, reflecting a rise in both refining activity and fuel demand, Energy Information Administration (EIA) data showed as reported by Reuters.

Crude inventories fell by 2.5 million barrels to 457 million barrels in the week ended May 10, the EIA said.

U.S. consumer prices rose less than expected in April in a boost to financial market expectations for a September cut to interest rates by the Federal Reserve, which could temper dollar strength and make oil more affordable for holders of other currencies.

"A more tamed read for U.S. April inflation and a far weaker than expected read in U.S. retail sales seem to offer room for the Fed to consider earlier rate cuts, with market expectations leaning more firmly for policy easing to kickstart in September," said IG market strategist Yeap Jun Rong.

In the Middle East, Israeli troops battled Hamas militants across Gaza, including Rafah, which had been a civilian refuge.

Ceasefire talks mediated by Qatar and Egypt are at a stalemate, with Hamas demanding an end to attacks and Israel refusing until the group is annihilated.

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