Oil Advances on US Stockpile Decline and Broader Risk-On Mood

May 16, 2024 | blog

Article content material

(Bloomberg) — Oil rose for a second day, buoyed by shrinking US stockpiles and a wider risk-on temper triggered by indicators of ebbing US inflation.

Global benchmark Brent topped $83 a barrel after climbing 0.5% on Wednesday, whereas US benchmark West Texas Intermediate was over $79. US oil inventories fell by 2.5 million barrels final week for the primary back-to-back drop since March, taking nationwide holdings to the bottom in virtually a month.

Article content material

In broader markets, danger property pushed increased after a measure of US inflation cooled for the primary time in six months, providing scope for looser financial coverage from the Federal Reserve. That tugged the US greenback decrease — with a Bloomberg gauge of the forex on its third day of losses — making commodities extra enticing for abroad consumers.

Crude stays increased within the yr up to now as OPEC+ nations curbed provide, though costs have pared positive factors since early April as Middle East tensions light and indicators of some product weak spot appeared. The International Energy Agency shaved its yearly demand progress forecast by 140,000 barrels a day, in response to a midweek report, though it nonetheless sees international demand at an annual document of 103.2 million barrels a day after revising final yr’s consumption estimates.

“Recent macro data from the US has raised expectations that the Fed could start cutting rates soon, which will be providing some support to oil,” stated Warren Patterson, head of commodities technique for ING Groep NV. Still, the market stays range-bound, and wanted both readability on OPEC+ coverage or a recent catalyst to interrupt out, he stated.

Geopolitics was additionally in focus as Russian President Vladimir Putin arrived in Beijing for his first go to to China in his new time period, highlighting the significance of the connection to Moscow because it continues its conflict in Ukraine. Asia’s largest economic system has been taking extra flows of Russian crude following the invasion as consumers in Europe and the US turned away.

To get Bloomberg’s Energy Daily publication into your inbox, click on right here.

Share this text in your social community

MoneyMaker FX EA Trading Robot

powered by