Oil rates continue rising due to US, China economic optimism
(MENAFN) Oil prices continued their upward trajectory on Friday, supported by growing optimism regarding economic growth in both the United States and China. The international benchmark, brent crude, rose by 0.06 percent, reaching USD75.82 per barrel at 11:12 a.m. local time (0812 GMT), a slight increase from USD75.77 at the close of the previous session. Similarly, the US benchmark West Texas Intermediate (WTI) saw a modest increase of 0.04 percent, climbing to USD72.78 per barrel, compared to USD72.75 at the end of the prior trading session.
The economic outlook in the US, particularly after the anticipated inauguration of President-elect Donald Trump on January 20, is expected to play a significant role in shaping oil prices. With Trump’s policies anticipated to boost demand for oil and natural gas, particularly given the US’s position as the world’s largest crude oil consumer, market players are becoming more confident, which is driving oil prices higher. Expectations of increased US oil consumption are easing concerns around demand, contributing to upward pressure on prices.
Additionally, the US Federal Reserve's expected interest rate cuts are adding to the positive sentiment. The Fed is predicted to lower interest rates twice during 2024, with the first cut expected near the end of the first half of the year. This action is seen as a means to stimulate economic activity, which in turn is expected to raise oil demand further. The anticipation of lower rates has contributed to the overall optimism in the market.
Furthermore, data showing that US crude oil stocks fell more than expected has reinforced the view of strengthening demand, adding further support to rising oil prices. The US Energy Information Administration (EIA) reported that commercial crude oil stocks dropped by approximately 1.2 million barrels, reaching 415.6 million barrels, which was more than market expectations of a 2.4 million-barrel decline. This reduction in stock levels is seen as a sign of tightening supply and increasing market confidence.
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