Oil Prices Rise on US Demand Strength, Set for Weekly Increase
Despite slightly declining on Friday, oil prices were poised for a second consecutive week of rises as optimism over demand from the world’s largest oil user was bolstered by recent U.S. economic statistics.
This week, U.S. West Texas Intermediate crude prices have grown by roughly 1.2%, while Brent crude futures have increased by roughly 1.3%.
By 0650 GMT on Friday, WTI had dropped 30 cents, or 0.4%, to $77.86, while Brent had dropped 22 cents, or 0.3%, to $80.82 per barrel.
The United States’ retail sales figures for Thursday above experts’ forecasts, while other data revealed that fewer people applied for unemployment benefits in the United States last week, which gave rise to fresh hopes for the country’s economic expansion.
According to ANZ Research analysts, “supply side concerns and positive economic data boosted investor sentiment, causing crude oil to reverse recent losses.”
Oil markets, according to analysts at consulting firm FGE, would now switch their attention back to geopolitics due to threats of retaliatory strikes by Iran against Israel in response to the murder of a Hamas commander in Tehran.
On Thursday, new rounds of talks to achieve a ceasefire in the Gaza conflict got underway while Israeli forces persisted in their attack on the Palestinian territory.
The negotiations, which Hamas has boycotted, were postponed and will pick back up on Friday in Doha, the capital of Qatar.
Due to the weak demand for fuel, Chinese refineries drastically reduced their rates for processing crude last month in an effort to contain oil prices.
Citing lower forecasts for China, the Organization of the Petroleum Exporting Countries (OPEC) reduced its demand outlook for this year on Monday.
“Demand for gasoline and distillate is remained high even though crude oil stockpiles increased last week. This doesn’t seem to be the case in China, where apparent oil demand decreased by 8% year over year in July, according to ANZ analysts.
