Ana sayfa » Oil prices rise after three days of losses on hopes that the US could renew SPRs

Oil prices rise after three days of losses on hopes that the US could renew SPRs

Unexpected rise in US crude oil stocks will ease supply concerns in the Middle East


Oil prices rose on Thursday, rebounding from three days of losses on expectations that lower oil levels could prompt the United States, the world’s largest consumer of crude oil, to start replenishing its strategic reserves.

Still, prices fell more than 3% on Wednesday after the Federal Reserve kept interest rates steady; This could constrain economic growth this year and limit increases in oil demand.

The unexpected increase in US crude oil stocks and signs that an Israel-Hamas ceasefire is approaching, easing supply concerns in the Middle East, also put pressure on crude oil.

July Brent crude oil futures rose 58 cents, or 0.7%, to $84.02 a barrel as of 06:33 GMT on Thursday. West Texas Intermediate (WTI) crude oil rose 53 cents, or 0.7%, to $79.53 a barrel in June.

The oil market has been supported by expectations that the US will take action to build its strategic reserves if WTI falls below $79.

The United States has said it aims to replenish its Strategic Petroleum Reserve (SPR) after a historic sell-off from its emergency stockpile in 2022 and wants to buy back oil at $79 a barrel or lower.

Following the renewed move led by Egypt in the Middle East, expectations that a ceasefire agreement between Israel and Hamas may be on the horizon have increased.

Still, Netanyahu vowed to press ahead with his long-promised assault on the southern Gaza city of Rafah, despite the US stance and the UN warning that it would lead to “tragedy”.

As crude oil inventories rise in the US and the impact of the Fed’s signal of higher interest rates for a longer period gets closer to being fully revealed, attention will turn to the outcome of the Gaza talks. As long as the latest optimism regarding the ceasefire continues, the downward trend in crude oil is expected to continue.

The US Energy Information Administration (EIA) said crude inventories increased by 7.3 million barrels to 460.9 million barrels in the week ending April 26, comparing to the surveys expectations for a decrease of 1.1 million barrels. He also said crude stocks are at the highest level since June.

In response to disappointing inflation readings, the US Federal Reserve kept interest rates steady on Wednesday, signaling that it is headed for eventual declines in borrowing costs.

Any delay in interest rate cuts could slow economic growth and reduce oil demand.

Still, the continued supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies will support prices.

Analysts expect OPEC+ to continue production cuts in the second half of the year at its meeting on June 1. However, if prices trend upward towards the $90-100+ range, OPEC+ will likely ease cuts and create a soft cap for oil.