Crude oil prices extended gains on Thursday, July 11, keeping the Brent crude benchmark above the $85 per barrel-mark, after Wall Street experts lifted bets on interest rate cuts by the US Federal Reserve.
This came after US government data showed an unexpected slowdown in consumer price-based (CPI) inflation.
Coming to domestic prices, crude oil futures last traded 0.55 per cent higher at ₹6,896 per barrel on the multi-commodity exchange (MCX).
What's pushing crude oil prices?
Analysts noted that the recovery in crude oil prices was driven by a decrease in US oil stocks, improved demand prospects, and hopes for rate cuts.
Crude oil prices extended gains on Thursday, July 11, keeping the Brent crude benchmark above the $85 per barrel-mark, after Wall Street experts lifted bets on interest rate cuts by the US Federal Reserve. This came after US government data showed an unexpected slowdown in consumer price-based (CPI) inflation.
Brent crude futures were up 23 cents, or 0.3 per cent, at $85.31 per barrel. US West Texas Intermediate crude futures rose 36 cents, or 0.4 per cent, to $82.46 per barrel. Coming to domestic prices, crude oil futures last traded 0.55 per cent higher at ₹6,896 per barrel on the multi-commodity exchange (MCX).
What's pushing crude oil prices? -Data showed US consumer prices fell in June, stoking hopes the US Federal Reserve will cut rates soon. After the data, traders priced an 89 per cent probability of a rate cut in September, up from 73 per cent on Wednesday. Slowing inflation and interest rate cuts will likely spur more economic activity.
-US Fed Chair Jerome Powell acknowledged the recent improvement in price pressures but told lawmakers that more data was needed to strengthen the case for rate cuts. The data pulled the US dollar index lower which can support oil prices as a softer greenback can lift demand for dollar-denominated oil from buyers using other currencies.
-Oil prices also rose on Wednesday, snapping a three-day losing streak after US data showed a draw in crude stocks in the world's top oil market along with the declining inventories and strong demand for gasoline and jet fuel.
-In its monthly oil market report, the International Energy Agency (IEA) saw global demand growth slowing to under a million barrels a day this year and next, mainly reflecting a contraction in China's consumption.
-The Organisation of Petroleum Exporting Countries (OPEC), in its monthly report, kept forecasts for world demand growth steady, at 2.25 million for 2024 and 1.85 million bpd for 2025. Analysts said that OPEC and IEA forecasts are wider apart than usual, partly due to differences of opinion over the pace of the world's transition to clean fuels.
Where are prices headed? Analysts noted that the recovery in crude oil prices was driven by a decrease in US oil stocks, improved demand prospects, and hopes for rate cuts. According to the US Energy Information Administration (EIA), crude oil inventories in the US decreased by 3.4 million barrels, compared to the expected decline of 1.3 million barrels.
