Oil prices rise as US summer driving season approaches
Oil prices have also found support from a softer dollar and stimulus measures by China
15 May 2024 - 08:37
byKatya Golubkova and emily chow
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Singapore — Oil prices rose on Wednesday on expectations for higher demand as the dollar weakened and a report showed US crude and petrol inventories fell while the release of inflation data may point to a more supportive economic outlook.
Brent crude futures were up 50c, or 0.6% at $82.88 a barrel. US West Texas Intermediate crude futures (WTI) rose 52c, or 0.7%, to $78.54 a barrel by 5.05am GMT.
US crude oil inventories fell 3.104-million barrels in the week ended May 10, according to market sources citing American Petroleum Institute figures on Tuesday. Petrol inventories fell by 1.269-million barrels, and distillates rose by 673,000 barrels.
US government inventory data is due later on Wednesday and is likely to also show a drop in crude stockpiles as refineries increase their runs to meet increased fuel demand heading into the peak summer driving season.
“Expectations of another drawdown in US oil inventories should support oil prices,” ANZ Research said in a note.
US Consumer Price Index (CPI) data is also due on Wednesday and should give a clearer indication whether the Federal Reserve may cut interest rates later this year, which could spur the economy and boost fuel demand.
Oil prices also found support from a softer dollar and stimulus measures from China, said independent market analyst Tina Teng, with a weaker greenback making dollar-denominated oil cheaper for investors holding other currencies.
Teng was referring to China’s plans to raise 1-trillion yuan in long-term special treasury bonds this week to raise funds to stimulate key sectors of its flagging economy, which is the world’s largest oil importer.
“The US CPI and China’s economic data is key to driving oil prices for the rest of the week,” she added. China will release economic activity data on Friday.
Prices were also supported by concerns about Canadian oil supply, a key exporter to the US
A large wildfire is approaching Fort McMurray, the hub for Canada’s oil sands industry that produces 3.3-million barrels per day of crude, or two-thirds of the country’s total output.
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 prices rise as US summer driving season approaches
Oil prices have also found support from a softer dollar and stimulus measures by China
Singapore — Oil prices rose on Wednesday on expectations for higher demand as the dollar weakened and a report showed US crude and petrol inventories fell while the release of inflation data may point to a more supportive economic outlook.
Brent crude futures were up 50c, or 0.6% at $82.88 a barrel. US West Texas Intermediate crude futures (WTI) rose 52c, or 0.7%, to $78.54 a barrel by 5.05am GMT.
US crude oil inventories fell 3.104-million barrels in the week ended May 10, according to market sources citing American Petroleum Institute figures on Tuesday. Petrol inventories fell by 1.269-million barrels, and distillates rose by 673,000 barrels.
US government inventory data is due later on Wednesday and is likely to also show a drop in crude stockpiles as refineries increase their runs to meet increased fuel demand heading into the peak summer driving season.
“Expectations of another drawdown in US oil inventories should support oil prices,” ANZ Research said in a note.
US Consumer Price Index (CPI) data is also due on Wednesday and should give a clearer indication whether the Federal Reserve may cut interest rates later this year, which could spur the economy and boost fuel demand.
Oil prices also found support from a softer dollar and stimulus measures from China, said independent market analyst Tina Teng, with a weaker greenback making dollar-denominated oil cheaper for investors holding other currencies.
Teng was referring to China’s plans to raise 1-trillion yuan in long-term special treasury bonds this week to raise funds to stimulate key sectors of its flagging economy, which is the world’s largest oil importer.
“The US CPI and China’s economic data is key to driving oil prices for the rest of the week,” she added. China will release economic activity data on Friday.
Prices were also supported by concerns about Canadian oil supply, a key exporter to the US
A large wildfire is approaching Fort McMurray, the hub for Canada’s oil sands industry that produces 3.3-million barrels per day of crude, or two-thirds of the country’s total output.
Reuters
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