August 15, 2024 (MLN): Oil prices started the week strong, rising after two consecutive declines, amid increased optimism that potential U.S. interest rate cuts will boost economic activity and fuel consumption.
Brent crude traded near $79 per barrel, up by 0.7% compared to yesterday’s close.
While West Texas Intermediate crude (WTI) was at $77.47 per barrel.
Both benchmarks fell more than 1% on Wednesday after U.S. crude inventories rose unexpectedly and on easing worries about a wider Middle East conflict.
U.S. consumer prices rose moderately in July and the annual increase in inflation slowed to below 3% for the first time in nearly 3-1/2 years, reinforcing expectations the Federal Reserve will cut interest rates next month, as Reuters reported.
"Economic growth and oil demand concerns continued to dominate sentiment, which was in a holding pattern after the U.S. July inflation reading on Wednesday came within expectations," said Vandana Hari, founder of oil market analysis provider Vanda Insights.
Investor worries over Iran's potential response to the killing of the leader of the Palestinian Islamist group Hamas last month supported prices. Three senior Iranian officials have said that only a ceasefire deal in Gaza would hold Iran back from direct retaliation against Israel for the assassination.
"Geopolitical risk continues to hang over the oil market. It is still unclear how and if Iran will retaliate against Israel," ING analysts said in a client note.
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However, oil inventory gains raised concerns of weaker demand, analysts at ANZ said in a client note. U.S. crude oil stockpiles rose by 1.4 million barrels in the week ended August 09, compared with estimates for a 2.2m barrel draw, building for the first time since late June.
China's factory output growth slowed in July while refinery output fell for a fourth month, underscoring the country's spotty economic recovery, also limiting the market's upside.
Copyright Mettis Link News
Posted on: 2024-08-15T15:17:22+05:00
