Oil rates surge on Monday as US inflation data indicates slowdown
Date
12/23/2024 2:05:39 AM
(MENAFN) Oil prices climbed at the start of trading on Monday after U.S. inflation data indicated a slowdown, renewing hopes for further monetary policy easing next year to bolster global economic growth and oil demand, according to a UK news agency. This optimism contributed to early gains in the energy market as traders speculated on the potential for more supportive conditions in 2024.
Brent crude futures rose by 26 cents, or 0.4 percent, to USD73.20 a barrel by 01:41 GMT, while West Texas Intermediate (WTI) crude futures increased by 31 cents, or 0.5 percent, to USD69.77 a barrel. The modest gains marked a recovery after a challenging week for crude prices. Last week, oil prices dropped by more than 2 percent due to concerns over global economic growth and subdued demand, following cautious signals from the U.S. Federal Reserve regarding future monetary policy easing.
In addition to U.S. policy considerations, market sentiment was influenced by research from Sinopec, Asia's largest oil refiner, which projected that China's oil consumption would peak by 2027. This forecast added pressure to prices amid broader uncertainties about long-term demand trends in the world's second-largest economy. Meanwhile, the U.S. personal consumption expenditures (PCE) index rose 2.4 percent year-on-year in November, slightly below economists’ expectations of 2.5 percent, reinforcing the view of easing inflation.
Tony Sycamore, a market analyst at IG, noted that risk assets, including U.S. equity futures and crude oil, began the week on firmer ground. He attributed the positive momentum to lower inflation data, which helped alleviate concerns sparked by the Federal Reserve's recent interest rate cut. Sycamore also highlighted the significance of the U.S. Senate passing legislation over the weekend to end a brief government shutdown, which provided additional support to market sentiment.
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