Crude oil prices rose, during today’s trading, Thursday, May 11 (2023), in an attempt to compensate for the losses incurred in the previous session.
This comes with the support of fuel demand data from the United States, the world’s largest oil consumer, which saw larger-than-expected withdrawals over the past week.
Crude oil prices today
By 06:57 a.m. GMT (09:57 a.m. Mecca), benchmark Brent crude futures – for July 2023 delivery – rose 0.22%, to record $76.58 a barrel.
US West Texas Intermediate crude futures – for June 2023 delivery – also increased by 0.21%, to record $ 72.71 a barrel, according to the data seen by the specialized energy platform.
And crude oil prices ended their trading, yesterday, Wednesday, May 10, in decline, after 3 sessions of gains, with the release of US inventories data.
fuel demand
A sharper-than-expected drop in US gasoline inventories pushed up crude oil prices; This reflects the strong demand for transportation fuels in the United States.
However; Investors remained cautious. The rise in global interest rates continued to raise fears of a global economic recession that could threaten demand.
“Brent crude prices managed to regain some ground recently from previous oversold technical conditions, but progress has stalled somewhat with unresolved global banking tensions keeping sentiment in check,” said market analyst at IG, Yip Jun Rong.
He added that the continued negative risks of global growth conditions could put pressure on crude oil prices and prevent them from rising, with the need for a more tangible catalyst to push another upwards.
The latest US data showed that consumer prices rose in April; which increases the possibility that the Federal Reserve will continue its policy of raising interest rates; Which may have a negative impact on reducing the demand for oil.
US oil stocks
Meanwhile, US gasoline stocks fell by 3.2 million barrels last week; That is, much more than analysts’ expectations of 1.2 million barrels, according to the latest data from the US Energy Information Administration.
Distillate inventories also fell, while demand for jet fuel in the United States rose to its highest level since December 2019.
Analysts at ANZ said the uncertain economic backdrop continues to cloud the outlook.
ANZ analysts added: “While US inflation eased more than expected in April, there are concerns that the impact of recent interest rate increases is now only being felt in the US economy.”
They noted that bearish sentiment continues to permeate commodity markets amid a lack of signs of stronger demand, Reuters reported.
Meanwhile, investors are also looking forward to detailed talks on raising the US government’s debt ceiling of $31.4 trillion that began on Wednesday, with Republicans continuing to insist on spending cuts.
The standoff alarmed investors. This led to a rise in the cost of insuring US government debt to record levels; Wall Street is becoming more concerned about default risks than ever before.
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