Home Investing News Oil prices creep lower amid mixed supply cues, US inflation in focus

Oil prices creep lower amid mixed supply cues, US inflation in focus


Oil prices creep lower amid mixed supply cues, US inflation in focus By Investing.com

Breaking News


AuthorAmbar WarrickCommodities

Published Feb 28, 2024 08:36PM ET

© Reuters.

Investing.com– Oil prices fell slightly in Asian trade on Thursday as markets digested differing cues on supply from the U.S. and the Organization of Petroleum Exporting Countries. 

But any big moves were limited, with traders keeping to the sidelines ahead of key U.S. inflation data, which is widely expected to factor into the outlook for interest rates.

Uncertainty over an Israel-Hamas ceasefire also crept back into markets, as U.S. President Joe Biden said he expected a Ramadan truce to be announced by next week. But both Israeli and Palestinian leaders cast doubts over his comments.

Brent oil futures expiring in April fell 0.3% to $83.46 a barrel, while West Texas Intermediate crude futures fell 0.4% to $78.25 a barrel by 20:24 ET (01:24 GMT). 

PCE data in focus as Fed officials talk down early rate cuts 

Resilience in the dollar weighed on crude markets this week, as focus remained largely on PCE price index data- which is the Federal Reserve’s preferred inflation gauge.

The reading is due later on Thursday and is likely to reiterate that U.S. inflation remained sticky in January.

A string of Fed officials said this week that more work was needed to bring inflation in line with the central bank’s 2% annual target, and that the Fed was in no hurry to begin cutting rates early.

Fears of higher rates have been a key weight on oil, given that economic conditions and demand usually deteriorate in high rate environments.

US inventories, OPEC reports offer mixed cues on supply 

Oil markets were also digesting somewhat mixed signals on the state of supplies in the coming months.

Official U.S. inventory data showed stockpiles grew more than expected in the week to February 23, which ANZ analysts said indicated that the “market may not be as tight as originally thought.” 

U.S. production also remained at record highs- a trend that markets expect will help plug some supply gaps from OPEC cuts and Middle East disruptions.

But expectations of extended OPEC cuts, following some media reports this week, were a key support to oil prices in recent sessions, with analysts forecasting tighter markets this year.

The OPEC is now widely expected to maintain its current production curbs until end-2024. 

Uncertainty over crude demand also persisted. GDP data on Wednesday showed that the U.S. economy remained resilient in the fourth quarter, pointing to some sustained strength in the world’s largest fuel consumer.

But on the other hand, fears of a Chinese demand slowdown grew after a major state-owned producer warned that oil demand in the world’s largest crude importer was expected to remain stagnant this year.

Oil prices creep lower amid mixed supply cues, US inflation in focus

Related Articles

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning
Do not sell my personal information

© 2007-2024 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Related News