Login ID:
Partner Login
Contact Us : 7066511911

Crude oil posts weekly drop as interest rate policy spurs fuel demand concerns

25 May 2024 8:42 am
 Comments 0 Comments  |  Comments Post Comment  |  Font Size A A A 

Mumbai, 25 May (Commoditiescontrol): Crude oil prices experienced a modest rise of about 1% on Friday, but recorded a weekly decline due to concerns that robust U.S. economic data could lead to prolonged high interest rates, potentially dampening fuel demand. Brent crude's July contract increased by 76 cents to $82.12 a barrel, while the more actively traded August contract rose by 73 cents to $81.84. U.S. West Texas Intermediate (WTI) crude futures climbed 85 cents, or 1.1%, to settle at $77.72.

Despite Friday's gains, Brent closed the week down 2.1%, experiencing its longest losing streak since early January. Similarly, WTI fell 2.8% for the week. Analysts speculate that the recent selloff might have been overdone, especially with the expected rise in summer demand in the U.S. starting this weekend.

Minutes from the Fed's latest meeting indicated some policymakers were uncertain if current rates were sufficient to control inflation, though further rate hikes appear unlikely.

High interest rates can elevate borrowing costs, potentially slowing economic activity and reducing oil demand. Consumer sentiment has also declined to a five-month low due to fears of persistently high borrowing costs, which could suggest slower consumer spending.

However, global oil demand remains strong. Morgan Stanley analysts project an increase of about 1.5 million barrels per day in oil liquids consumption this year. The Energy Information Administration reported U.S. gasoline demand at its highest since November in the week ending May 17, counterbalancing soft domestic demand with stronger global consumption.

On the supply front, the oil rig count remained steady at 497 this week. The market is now focused on the upcoming June 2 OPEC+ meeting, where members will discuss extending current voluntary production cuts. Analysts expect these cuts to continue at least through September.

Russia acknowledged exceeding its OPEC+ production quota in April due to technical issues, while Venezuela plans to boost production to 1.23 million barrels per day by December. Additionally, the U.S. Commodity Futures Trading Commission reported an increase in net long positions in U.S. crude futures and options for the week ending May 21.

(By Commoditiescontrol Bureau: 09820130172)

  Rate this story 1 out of 52 out of 53 out of 54 out of 55 out of 5 Rated

   Post comment
Comment :

Note : This forum is moderated. We reserve the right to not publish and/or edit the comment on the site, if the comment is offensive, contains inappropriate data or violates our editorial policy.
Name :  
Email :  

Post Comment  

Latest Market Commentary
Market Snapshot MCX - NCDEX
Market Snapshot MCX - NCDEX
Top 5 News
DCE Daily Rates Update ( Time: 20:19 ) - 18 JUNE 2024
ICE/ZCE Daily Rates Update ( Time: 20:18 ) - 18 JUNE 20...
London Metal Exchange Settlement - 18-Jun-2024
Market Wise Chana Arrivals: Supply Up By 9.46% Against...
Market Wise Tur Arrivals: Supply Up By 0.48% Against P...
Top 5 Special Reports
Weekly: ICE Sugar Futures Revived By ISO's Global Defic...
Weekly: Cotton Prices Slide for Third Consecutive Week ...
India Plans Boost in Arhar and Urad Dal Production to T...
US soybean net sales for May 31-June 6 at 377,100 MT, u...
US cotton net export sales for May 31-June 6 at 177,100...
Copyright © CC Commodity Info Services LLP. All rights reserved.