Oil prices soar over US demand surge, ceasefire in Middle East, weaker dollar
Date
11/27/2024 7:34:08 AM
(MENAFN) Oil prices rose on Wednesday, supported by stronger demand in the United States, a weaker US dollar, and eased supply concerns following a Middle East cease-fire. Brent crude, the international oil benchmark, increased by 0.43 percent to USD72.49 per barrel as of 9:58 a.m. local time (0658 GMT), up from USD72.18 the previous session. Similarly, the US benchmark, West Texas Intermediate (WTI), also gained 0.43 percent, reaching USD68.83 per barrel compared to the prior close of USD68.53.
The American Petroleum Institute (API) reported a significant drop in US crude oil stocks, further boosting prices. US commercial crude inventories declined by 5.93 million barrels last week, far exceeding market expectations of a 250,000-barrel increase. This unexpected reduction signaled robust demand in the world’s largest crude-consuming nation. The US Energy Information Administration’s official inventory report is expected later in the day, which could provide further insights into the market.
The weakening US dollar also played a role in oil's price rise. The US dollar index, which measures the currency against a basket of others, dropped 0.15 percent to 106.809. A weaker dollar tends to make oil more affordable for buyers using other currencies, thereby spurring demand.
Additionally, the cease-fire agreement between Lebanon and Israel, effective at 4 a.m. local time, alleviated supply concerns. Under the deal, the Lebanese Armed Forces will take control of the southern border within 60 days, reducing tensions in the region and stabilizing supply outlooks.
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