Oil Prices Rise on Growing Demand and Federal Reserve Signals
Increased Demand and Positive Signals Drive Oil Prices Up
Oil prices experienced a surge on Friday due to rising demand in the United States and China, the two largest oil consumers globally. The U.S. Federal Reserve also provided a positive outlook on potential rate cuts, further boosting market sentiment.
Key Figures in Oil Prices
Oil futures saw a 0.45% increase, with a rise of 37 cents to reach $83.32 per barrel at 0110 GMT. Meanwhile, U.S. West Texas Intermediate crude futures rose by 0.61%, climbing 48 cents to $79.44.
Strong Demand Indicators
Data from the Energy Information Administration revealed a significant decline in U.S. gasoline inventories by 4.5 million barrels last week, alongside a 4.1 million barrel drop in distillate stockpiles. These reductions surpassed expectations, indicating robust demand in the market.
Market Outlook and Projections
Analysts from ANZ Research highlighted the upcoming U.S. driving season as a potential catalyst for further tightening in the oil market in the coming weeks, projecting a more constrained supply-demand balance.
Global Trends and Economic Activity
China reported a 5.1% increase in oil imports during the first two months of 2024 compared to the previous year. India also witnessed a 5.7% rise in fuel consumption in February, supported by strong factory operations in the country.
Federal Reserve’s Impact
Federal Reserve Chair Jerome Powell’s statement on potential interest rate cuts provided additional support to oil prices. Powell mentioned the central bank’s confidence in inflation decreasing, hinting at future policy adjustments.
Operational Developments in Canada
TC Energy’s Keystone oil pipeline in Canada resumed operations after a temporary halt, ensuring the uninterrupted flow of Canadian oil to the United States. This development played a role in supporting oil prices in the previous trading session.
