Global Crude Oil Up 4% This Week! Prices To Rise Further?

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Global crude oil prices are expected to rise by roughly 4% by the end of the week

Despite a slight decrease on Friday, oil prices were expected to rise by almost 4% this week due to an…

Global crude oil prices are expected to rise by roughly 4% by the end of the week

Despite a slight decrease on Friday, oil prices were expected to rise by almost 4% this week due to an unexpected drop in U.S. stockpiles and an increase in the International Energy Agency’s 2024 oil demand estimates. Following a gain of 25 cents or 0.3% to $85.17 per barrel at 0533 GMT on Thursday, Brent crude oil futures crossed $85 per barrel for the first time since November. U.S. West Texas Intermediate (WTI) crude dropped to $81.04 by 22 cents, or 0.3%.

As Houthi attacks disrupt Red Sea shipping, the IEA on Thursday raised its forecast for 2024 oil demand for the fourth time since November. As stated in its most recent report, the IEA projects a 1.3 million barrel increase in global oil demand by 2024—a 110,000 barrel increase from the previous month. Following the extension of cuts by OPEC+ members, a slight supply deficit was predicted this year as opposed to a surplus last year.

India’s need for jet fuel increased in February compared to levels before the pandemic

Analysts from ANZ also mentioned that increased use of U.S. oil refineries is anticipated. In a report published on Friday, they stated, “Refineries are coming online after shutting capacity in January due to winter freeze.” “Margins at European refineries are increasing as well,” they stated, mentioning indications of a “tightening market balance.”

This week’s gains have been achieved despite the U.S. dollar strengthening at its fastest rate in eight weeks. Due to a stronger dollar, crude becomes more expensive for holders of other currencies. This week’s Ukrainian attacks on Russian oil refineries, which resulted in one of the most significant attacks against Russia’s energy sector in recent memory and started a fire at Rosneft’s largest refinery, also helped to support oil prices.

According to the Energy Information Administration’s report on Wednesday, U.S. crude oil stockpiles unexpectedly decreased last week as refineries increased processing. At the same time, gasoline inventories plummeted as demand increased. In response to uncertainty surrounding the timing of anticipated Federal Reserve interest rate cuts, China’s central bank maintained the stability of a key policy rate on the demand side.

Reduced interest rates save consumers’ borrowing costs, which can increase demand for oil and spur economic growth. Several indications of the U.S. economy slowing down were viewed as unlikely to prompt the Federal Reserve to begin lowering interest rates before June, as additional data released on Thursday revealed a higher-than-expected rise in producer prices last month.

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