Oil prices are rising on Friday due to rising demand from the world’s biggest consumers, the United States and China, and the US Federal Reserve giving positive signals about the possibility of an interest rate cut.
Brent crude futures were up 0.7%, or 58 cents, at $83.54 a barrel at 0700 GMT. WTI crude oil futures rose 0.9%, or 69 cents, to $79.62.
Brent and WTI are down 0.1% and 0.5% respectively on the week so far.
Data from the Energy Information Administration (EIA) showed that US gasoline stocks decreased by 4.5 million barrels last week, and distillate stocks decreased by 4.1 million. Both fell more than expected, a sign of strong demand.
With the upcoming travel season in the US, demand may increase and the market may shrink further in the coming weeks.
Crude oil imports in China rose 5.1% in the first two months of 2024 compared to the previous year. India’s fuel consumption rose 5.7% in February due to strong factory activity in the world’s third-largest oil importer and consumer.
After accounting for the extra day in February this year, crude oil imports in China rose 3.3% year-on-year, which is in line with expectations for demand growth for the year.
However, this growth will be significantly lower than in 2023, when the end of COVID restrictions has led to an increase in transportation and travel activity.
Adding further support to oil prices, Powell said on Thursday that the US central bank is “not far away” from gaining enough confidence that inflation has fallen far enough to start cutting interest rates.
The weakness in the US dollar may have supported this comment by the Fed Chairman, who was not as hawkish as initially expected.
The Keystone oil pipeline, a major line of Canadian oil to the United States that was one of the factors supporting prices in the previous session, resumed service on Thursday after being temporarily disabled.
