February 14, 2024 (MLN): Global oil prices continued their upward march on Wednesday as geopolitical tensions persisted in the Middle East and Eastern Europe, but gains were restricted due to a higher-than-expected U.S. inflation rate.
Brent crude is currently trading at $82.28 per barrel, up by 0.22% on the day.
While West Texas Intermediate crude (WTI) is trading at $77.49 per barrel, up by 0.17% on the day.
It is important to note here that both benchmarks are on track to mark their eighth consecutive daily gain.
The U.S. rejected Russian President Vladimir Putin's suggestion of a ceasefire in Ukraine, according to sources, as Reuters reported.
The rejection "punctuates that there is not really an end game in terms of a ceasefire or a peace deal until Ukraine gets what it wants," said John Kilduff, partner at New York-based Again Capital. "U.S. sanctions are finally starting to bite as well, and we are seeing various countries backing away from taking Russian supplies."
Fears of further escalation of the war in the Middle East also stoked worries about the oil supply outlook.
Talks involving the U.S., Egypt, Israel and Qatar on a Gaza truce ended without a breakthrough as calls grew for Israel to hold back on a planned assault on the southern end of the enclave, crammed with over a million displaced people.
Also weighing on the market, data on Tuesday showed U.S. consumer inflation stayed elevated last month. As a result, investors now expect Fed policymakers to wait longer before cutting interest rates, potentially dampening economic growth and oil demand.
With expectations of rate cuts pushed out, the dollar rose to a three-month peak. A stronger dollar typically weighs on demand for oil among buyers paying in other currencies.
"In addition, inventory builds are likely to surprise on the upside this week, and an outage at the BP refinery in Whiting is also not helping matters on the demand side."
U.S. crude oil inventories rose 8.52 million barrels in the week ended February 9, according to market sources citing American Petroleum Institute figures released late on Tuesday.
"The builds in crude oil were fairly bearish. However, this was offset by large product declines," ING analysts said in a note, adding that the data probably was a reflection of the 435,000 barrels per day Whiting refinery outage.
The API data showed gasoline inventories fell 7.23m barrels and distillate stocks fell by 4.02m barrels, both much larger declines than analysts expected.
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Posted on: 2024-02-14T12:22:33+05:00
