Oil hardly changed, but poised for second week of gains
Signs of improving demand and falling US inventories provide support
21 June 2024 - 07:38
byLaila Kearney and Sudarshan Varadhan
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New York/Singapore — Crude oil futures were little changed on Friday but were set to rise for a second week amid signs of improving demand and falling oil and fuel inventories in the US, the world’s biggest oil consumer.
Brent futures for August settlement dipped 15c to $85.56 a barrel by 3.56am GMT after rising 0.8% in the previous session.
US West Texas Intermediate (WTI) crude futures for August delivery was down 14c to $81.15 a barrel. The July contract expired on Thursday at $82.17 a barrel, up 0.7%.
Prices have risen about 5% since the beginning of the month to the highest level in more than seven weeks.
“The seasonal demand increase, as shown by the latest EIA [Energy Information Administration] data, renewed confrontation between Israel and Hezbollah, and the hurricane season could sustain price strength into the summer,” Citi analysts said in a note.
US government data released on Thursday showed total product supplied, a proxy for the country’s demand, rose by 1.9-million barrels a day on the week to 21.1-million barrels a day.
The data from the EIA showed drawdown in US crude stockpiles by 2.5-million barrels in the week ending June 14 to 457.1-million barrels, compared with analysts’ expectations for a 2.2-million barrel draw.
Petrol inventories fell by 2.3-million barrels to 231.2-million barrels, the EIA said, compared with forecasts for a 600,000-barrel build.
Demand prospects elsewhere also helped push prices higher.
“Signs of stronger demand in Asia also boosted sentiment. Oil refineries across the region are bringing back some idled capacity after maintenance,” analysts at ANZ Research said.
Data released on Friday showed Japan’s core consumer prices last month gained 2.5% from a year earlier, growing from the previous month and keeping the country's central bank on track to raise interest rates in the coming months.
Weighing on prices were US data released on Thursday that showed a decline in new unemployment claims, which may lead the Federal Reserve to keep interest rates unchanged. Higher interest rates typically limit economic growth and, in turn, oil demand.
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 hardly changed, but poised for second week of gains
Signs of improving demand and falling US inventories provide support
New York/Singapore — Crude oil futures were little changed on Friday but were set to rise for a second week amid signs of improving demand and falling oil and fuel inventories in the US, the world’s biggest oil consumer.
Brent futures for August settlement dipped 15c to $85.56 a barrel by 3.56am GMT after rising 0.8% in the previous session.
US West Texas Intermediate (WTI) crude futures for August delivery was down 14c to $81.15 a barrel. The July contract expired on Thursday at $82.17 a barrel, up 0.7%.
Prices have risen about 5% since the beginning of the month to the highest level in more than seven weeks.
“The seasonal demand increase, as shown by the latest EIA [Energy Information Administration] data, renewed confrontation between Israel and Hezbollah, and the hurricane season could sustain price strength into the summer,” Citi analysts said in a note.
US government data released on Thursday showed total product supplied, a proxy for the country’s demand, rose by 1.9-million barrels a day on the week to 21.1-million barrels a day.
The data from the EIA showed drawdown in US crude stockpiles by 2.5-million barrels in the week ending June 14 to 457.1-million barrels, compared with analysts’ expectations for a 2.2-million barrel draw.
Petrol inventories fell by 2.3-million barrels to 231.2-million barrels, the EIA said, compared with forecasts for a 600,000-barrel build.
Demand prospects elsewhere also helped push prices higher.
“Signs of stronger demand in Asia also boosted sentiment. Oil refineries across the region are bringing back some idled capacity after maintenance,” analysts at ANZ Research said.
Data released on Friday showed Japan’s core consumer prices last month gained 2.5% from a year earlier, growing from the previous month and keeping the country's central bank on track to raise interest rates in the coming months.
Weighing on prices were US data released on Thursday that showed a decline in new unemployment claims, which may lead the Federal Reserve to keep interest rates unchanged. Higher interest rates typically limit economic growth and, in turn, oil demand.
Reuters
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