Data from the US and China points to higher demand and continuing uncertainty over the Gaza war supports prices
10 May 2024 - 08:22
byKatya Golubkova and Sudarshan Varadhan
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Singapore — Oil rose on Friday, set for a weekly gain, as data this week from the US and China, the world's two largest crude users, pointed to higher demand and continuing uncertainty over the Gaza war supported prices.
Falling US crude inventories spurred by higher refinery runs coincided with data released on Thursday showing China’s oil imports in April were higher than in 2023 on signs of improving trade activity. Negotiations to halt the fighting between Israel and Hamas have yielded no results, keeping alive concerns of potential Middle East supply disruptions.
Brent futures rose 58c, or 0.6%, to $84.41 a barrel by 5.14am GMT and are set for a weekly gain of 1.7%. US West Texas Intermediate (WTI) crude climbed 58c, or 0.7%, to $79.84, set for a weekly increase of 2.2%.
China’s exports and imports returned to growth in April after contracting in the previous month, signalling an improvement in demand.
“Ongoing signs of strength in demand in China should see commodity market remain well supported,” ANZ Research said in a note.
Israeli forces bombarded the city of Rafah in the Gaza Strip on Thursday, Palestinian residents said on Thursday, while an Israeli official said indirect negotiations with Hamas had ended. As the conflict continues, it raises the potential for other Middle Eastern countries to become involved, particularly Hamas’ main supporter Iran, a key producer.
“Israel’s groundwork for an intervention in Rafah and growing tensions on its Northern border are a reminder that geopolitical risks could persist through all of [the second quarter of] 2024, at least,” Citi analysts said in a note.
Still, the bank’s analysts see prices easing through 2024, with Brent averaging $86 a barrel in the second quarter and $74 in the third quarter amid looser supply and demand fundamentals as there are signs that global oil demand growth “appears to be moderating”.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil rises on Middle East tension and demand signs
Data from the US and China points to higher demand and continuing uncertainty over the Gaza war supports prices
Singapore — Oil rose on Friday, set for a weekly gain, as data this week from the US and China, the world's two largest crude users, pointed to higher demand and continuing uncertainty over the Gaza war supported prices.
Falling US crude inventories spurred by higher refinery runs coincided with data released on Thursday showing China’s oil imports in April were higher than in 2023 on signs of improving trade activity. Negotiations to halt the fighting between Israel and Hamas have yielded no results, keeping alive concerns of potential Middle East supply disruptions.
Brent futures rose 58c, or 0.6%, to $84.41 a barrel by 5.14am GMT and are set for a weekly gain of 1.7%. US West Texas Intermediate (WTI) crude climbed 58c, or 0.7%, to $79.84, set for a weekly increase of 2.2%.
China’s exports and imports returned to growth in April after contracting in the previous month, signalling an improvement in demand.
“Ongoing signs of strength in demand in China should see commodity market remain well supported,” ANZ Research said in a note.
Israeli forces bombarded the city of Rafah in the Gaza Strip on Thursday, Palestinian residents said on Thursday, while an Israeli official said indirect negotiations with Hamas had ended. As the conflict continues, it raises the potential for other Middle Eastern countries to become involved, particularly Hamas’ main supporter Iran, a key producer.
“Israel’s groundwork for an intervention in Rafah and growing tensions on its Northern border are a reminder that geopolitical risks could persist through all of [the second quarter of] 2024, at least,” Citi analysts said in a note.
Still, the bank’s analysts see prices easing through 2024, with Brent averaging $86 a barrel in the second quarter and $74 in the third quarter amid looser supply and demand fundamentals as there are signs that global oil demand growth “appears to be moderating”.
Reuters
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