Crude oil prices rose during trading today, Wednesday, April 12 (2023), to continue to reap gains for the second consecutive session.
This comes as the market awaits US inflation data later in the day, which is likely to influence the Federal Reserve’s interest rate hike policy in the future.
The Energy Information Administration raised crude oil price forecasts by nearly 3% in 2023, after moves announced by OPEC+ countries to cut production, but lowered estimates of demand for crude, in light of fears of a global recession.
Crude oil prices today
By 07:58 AM GMT (10:58 AM Mecca time), Brent crude futures for June 2023 delivery rose 0.11%, recording $85.70 a barrel.
West Texas Intermediate crude futures – for May 2023 delivery – increased by 0.04%, recording $81.56 a barrel, according to what was seen by the specialized energy platform.
And crude oil prices ended their dealings, yesterday, Tuesday, April 11, with an increase of about 2%, after a volatile session, to record the highest level since January 2023.
Oil market analysis
Crude oil prices got a boost in the session on optimism that the Federal Reserve is close to ending its cycle of rate hikes, making dollar-denominated oil cheaper for buyers holding other currencies.
The US Consumer Price Index is expected to show that core inflation for March rose 0.4% m/m and 5.6% y/y, according to a Reuters poll.
Philadelphia Fed President Patrick Harker said on Tuesday he feels the US central bank may soon finish raising interest rates, while Minneapolis Fed President Neel Kashkari said he thinks inflation is now at 5% as measured by the measure. The Fed’s favorite.
However, market analyst at IG, Yip Jun Rong, said that any “a higher-than-expected rise in inflation could pave the way for another 25 basis point rate hike in June.”
US oil stocks
Meanwhile, data from the American Petroleum Institute showed that crude stocks rose by about 380,000 barrels in the week ending April 7, according to sources, compared to the expectations of 8 analysts polled by Reuters for a drop of 600,000 barrels.
Meanwhile, gasoline inventories rose by about 450,000 barrels, according to the American Petroleum Institute report, while analysts had expected a 1.6 million-barrel decline.
The US government will release its inventory data at 02:30 PM GMT (05:30 PM Mecca time) on Wednesday.
demand for oil
In another negative case for oil demand, the International Monetary Fund, yesterday, Tuesday, April 11 (2023), cut its global growth forecast for 2023, citing the impact of higher interest rates.
In addition to inflation data, the market awaits more clarity on oil demand and supply, as monthly reports from the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency are released on Thursday and Friday, respectively.
Yesterday, the US Energy Information Administration cut its forecast for OPEC oil production by 0.5 million barrels per day for the rest of 2023, and cut its forecast for global oil demand growth for 2023 by 40,000 barrels per day.
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