Oil prices surge due to strong US demand, weakening dollar

2025-01-02 07:33:27

(MENAFN) Oil prices rose on Thursday, driven by a surge in demand in the US, the world's largest consumer, and a weakening US dollar index.

The international benchmark brent crude increased by 0.2 percent, reaching USD74.85 per barrel at 10:31 AM local time (0731 GMT), up from USD74.69 at the previous session’s close.

The US benchmark West Texas Intermediate (WTI) rose by 0.3 percent to USD71.76 per barrel, compared to its prior close of USD71.55.

Uncertainty about the actions of the incoming US administration and the Federal Reserve’s plans for the year continue to shape the oil market. Global concerns about recession and inflation are also putting pressure on asset prices.

Expectations of higher fossil energy investments in the US, spurred by policies from President-elect Donald Trump set to take effect on January 20, are contributing to the price increases.

The American Petroleum Institute (API) reported a drawdown in US commercial crude oil inventories for the week ending December 27. API data showed a decline of 1.4 million barrels, though it was smaller than the expected 3-million-barrel drop. This reduction in stockpiles points to strengthening demand in the US.

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