A view of the oil terminal at Kozmino, located near Nakhodka.


July 12, 2024 Tags:

Oil prices saw a slight increase on Friday, influenced by signs of easing inflation in the United States, which is the world’s largest oil consumer. However, despite the uptick, Brent crude was on track for a weekly decline.

Brent crude futures gained 49 cents, or about 0.6%, reaching $85.89 per barrel by 6:30 AM GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures rose by 58 cents, or 0.7%, bringing the price to $83.20 per barrel. Both types of oil had seen gains in the previous two sessions, yet were still expected to finish the week lower.

Specifically, Brent crude was poised for a roughly 1% decrease over the week, breaking a four-week streak of gains. WTI futures, on the other hand, remained relatively stable over the same period.

Investor sentiment improved following a report released on Thursday that indicated a decline in U.S. consumer prices for June. This has led to increased expectations that the Federal Reserve might lower interest rates soon. Lower interest rates generally support economic growth, which in turn could lead to higher fuel consumption.

However, the market is still waiting for more concrete signs regarding future actions. Federal Reserve Chair Jerome Powell noted the recent positive trends in inflation but emphasized that more data is needed to justify any cuts in interest rates.

"While cooling inflation might encourage the Fed to consider easing policies sooner rather than later, it also points to ongoing economic challenges," explained Yeap Jun Rong, a market strategist at IG.

In addition to inflation data, indications of strong summer fuel demand in the U.S. have also contributed to rising oil prices. Data revealed that U.S. gasoline demand reached 9.4 million barrels per day (bpd) during the week ending July 5, marking the highest level for that week since 2019. Additionally, jet fuel demand has shown the strongest performance on a four-week average since January 2020.

"The market seems stuck in a range, influenced by contrasting factors. There are hopes for a demand recovery due to strong summer fuel consumption, but ongoing economic weaknesses and uncertainties continue to weigh on sentiment," commented Emril Jamil, a senior oil analyst at LSEG.

Strong demand for fuel has prompted U.S. refiners to increase their operations and draw from crude oil stockpiles. Last week, U.S. Gulf Coast refiners reported a net input of crude oil exceeding 9.4 million bpd, the highest level since January 2019, according to government data.

In summary, while oil prices are showing signs of life amid favorable inflation data and strong summer demand, Brent crude faces the challenge of a weekly decline. Investors remain cautiously optimistic, hoping for future interest rate cuts that could stimulate economic growth and, subsequently, fuel consumption.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

You may also like

Wall Street Eyes Market Dips, But When Will It Be Safe to Buy?

The U.S. stock market is wrapping up one of its roughest quarters since the 1980s, trailing global markets by the....

Energy Stocks Boost S&P/TSX, U.S. Markets Mixed Ahead of Tariffs

Canada’s main stock index climbed on Monday, driven by gains in energy and industrial shares as oil prices surged. Meanwhile,....

Canada’s Economy Faces Slowdown as Tariff Pressures Rise

The Canadian economy started 2025 with momentum but is now losing steam due to harsh winter conditions and the looming....

Markets Slide 400 Points as Tariff, Inflation Fears Grow

Canadian and U.S. stock markets took a sharp dive on Friday as investors reacted to concerns about inflation and looming....

Stock Markets React as U.S. Auto Tariff Plans Shake Industry

Canada’s stock market remained unchanged on Thursday, while U.S. markets saw a dip following President Donald Trump’s announcement of new....

GameStop’s Bold Bitcoin Move Sparks Market Concerns

GameStop’s stock took a nosedive on Thursday after the company announced a controversial plan to sell debt and use the....

ICBC Announces $110 Rebates for Eligible Drivers

Many ICBC customers will soon receive $110 rebates, as the auto insurer distributes a new round of refunds. The rebates,....

Wall Street Holds Steady as Trump Media Soars Despite Market Uncertainty

Wall Street showed resilience on Tuesday, following a strong surge the previous day fueled by optimism that President Donald Trump’s....

S&P/TSX Gains as Metal Stocks Rise; U.S. Markets Also Up

Canada’s stock market saw a steady rise in late-morning trading, driven by gains in base metal stocks. The S&P/TSX composite....

Trump’s Tariff Shift Shakes U.S. Treasury Market

U.S. Treasury bonds took a hit as investors shifted toward riskier assets following reports that President Donald Trump’s upcoming tariffs....

Trump’s Trade War Reshapes Canada’s 2025 Election Debate

The rising cost of living has been a major issue for Canadians, and with the federal election on the horizon,....

Stock Markets Gain as Investors Eye Targeted US Tariffs

Stock futures in the US and Europe climbed on hopes that the next wave of tariffs from President Donald Trump’s....