Oil Prices Fall Amid Global Supply Concerns
Weekly Losses and Rate Cut Speculations
Oil prices declined on Friday, heading towards weekly losses due to worries about ample global supply. However, the losses were somewhat offset by speculations of potential interest rate cuts in the United States and Europe.
Futures Trading
By 09:20 ET (14.20 GMT), futures for oil traded 0.3% lower at $78.71 a barrel, while the contract dropped 0.3% to $82.75 a barrel.
Oversupply and Demand Concerns
Both benchmarks are set for weekly losses, reflecting worries about a well-supplied global market throughout the year. The IEA’s oil markets and industry division head mentioned a potentially slowing demand growth, which could impact prices.
China’s Import Data
China reported a 5.1% increase in imports in the first two months of the year, reaching approximately 10.74 million barrels per day. However, the overall trend in purchasing remains soft due to various factors affecting demand and economic indicators.
European Economic Indicators
European economic data indicated flat growth in the final quarter of the previous year, with the European Central Bank lowering its growth and inflation projections. The region is also contemplating interest rate cuts to stimulate economic activity.
Interest Rate Cut Speculations
Speculations of interest rate cuts in the US and Europe have helped limit the losses in oil prices. Federal Reserve Chair Jerome Powell hinted at the possibility of rate cuts, supported by positive job growth figures in the US.
European Central Bank’s Actions
The European Central Bank is considering lowering interest rates between April and June, as mentioned by French central bank head Francois Villeroy de Galhau. These potential rate cuts could impact future demand for crude oil.
