Oil lifts marginally as markets mull over fall in US stocks
Traders will be watching for the official US data on oil and product stockpiles due on Wednesday afternoon
24 April 2024 - 07:51
byKatya Golubkova and Trixie Yap
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Oil prices were slightly higher on Wednesday after industry data showed a surprise drop in US crude stocks last week, a positive sign for demand, though markets were also keeping a close eye on hostilities in the Middle East.
Brent crude futures gained 5c, or 0.06%, to $88.47 a barrel and US West Texas Intermediate crude futures climbed 8c, or 0.1%, to $83.44 a barrel at 4.10am GMT.
US crude inventories fell 3.237 million barrels in the week ended April 19, according to market sources citing American Petroleum Institute figures. In contrast, six analysts polled by Reuters had expected a rise of 800,000 barrels.
Traders will be watching for the official US data on oil and product stockpiles due at 2.30pm GMT for confirmation of the big drawdown.
US business activity cooled in April to a four-month low, with S&P Global saying on Tuesday that its flash composite PMI output index, which tracks the manufacturing and services sectors, fell to 50.9 in April from 52.1 in March.
“This could help convince policymakers that rate cuts are required to support the economy,” ANZ analysts said in a note.
US interest rate cuts could bolster economic growth and, in turn, demand for oil from the world's top consumer of the fuel.
Analysts were still focused on the latest developments in conflicts in the Middle East, though the effects on oil supplies remained limited for now.
“Recent reports suggest that both Iran and Israel consider the current operations concluded against one another, with no follow-up action required for now,” ING analysts said in a note.
“The US and Europe are preparing for new sanctions against Iran — although these may not have a material impact on oil supply in the immediate term,” they added.
Israeli strikes intensified across Gaza on Tuesday, in some of the heaviest shelling in weeks.
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 lifts marginally as markets mull over fall in US stocks
Traders will be watching for the official US data on oil and product stockpiles due on Wednesday afternoon
Oil prices were slightly higher on Wednesday after industry data showed a surprise drop in US crude stocks last week, a positive sign for demand, though markets were also keeping a close eye on hostilities in the Middle East.
Brent crude futures gained 5c, or 0.06%, to $88.47 a barrel and US West Texas Intermediate crude futures climbed 8c, or 0.1%, to $83.44 a barrel at 4.10am GMT.
US crude inventories fell 3.237 million barrels in the week ended April 19, according to market sources citing American Petroleum Institute figures. In contrast, six analysts polled by Reuters had expected a rise of 800,000 barrels.
Traders will be watching for the official US data on oil and product stockpiles due at 2.30pm GMT for confirmation of the big drawdown.
US business activity cooled in April to a four-month low, with S&P Global saying on Tuesday that its flash composite PMI output index, which tracks the manufacturing and services sectors, fell to 50.9 in April from 52.1 in March.
“This could help convince policymakers that rate cuts are required to support the economy,” ANZ analysts said in a note.
US interest rate cuts could bolster economic growth and, in turn, demand for oil from the world's top consumer of the fuel.
Analysts were still focused on the latest developments in conflicts in the Middle East, though the effects on oil supplies remained limited for now.
“Recent reports suggest that both Iran and Israel consider the current operations concluded against one another, with no follow-up action required for now,” ING analysts said in a note.
“The US and Europe are preparing for new sanctions against Iran — although these may not have a material impact on oil supply in the immediate term,” they added.
Israeli strikes intensified across Gaza on Tuesday, in some of the heaviest shelling in weeks.
Reuters
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