Oil Futures move Higher Friday, Recouping Weekly Losses
VIENNA (DTN) -- Oil futures closest to expiration on the New York Mercantile
Exchange and Brent crude on the Intercontinental Exchange jumped higher to kick
off the last trading day of the week shaped by the push-and-pull of U.S.
macroeconomic indicators on the one side and escalating rhetoric between Israel
and Iran on the other.
Wednesday's consumer price index showing inflation in the United States
remaining stickier than expected in March acted as a deathblow to expectations
the Federal Reserve might kick off the rate cutting cycle in June. The
resulting support for the U.S. dollar and prospects of a struggling
manufacturing sector exerted downward pressure on oil prices.
At the same time, tensions in the Middle East have been ramping up after
Iran vowed revenge for an Israeli strike on the Iranian consulate in Damascus
which killed high-ranking Iranian officials. U.S. and Israeli intelligence
services now expect an attack on an Israeli diplomatic mission or Israeli soil
to be imminent. Fears of an armed conflict with the 3.2 million bpd crude oil
producing country which could destabilize the entire region acted as a
counterweight to monetary policy concerns this week.
Friday morning, the International Energy Agency in its latest Oil Market
Report once again lowered its demand growth estimates. The Paris-based energy
watchdog expects global oil demand to expand by 1.2 million bpd in 2024 and 1.1
million bpd in 2025, citing slower growth and sluggish manufacturing activity
in Organization for Economic Cooperation and Development countries as the main
reason for the 130,000-bpd downward revision to this year's estimate. This came
after the Energy Information Administration on Tuesday also trimmed growth
expectations for this year in the latest Short-term Energy Outlook, from 1.43
million bpd to 950,000 bpd following a large upward revision to 2023 estimates.
OPEC, in contrast, left demand growth expectations unchanged in its latest
Monthly Oil Market Report released Thursday, calling for 2.25 million bpd of
global oil demand growth in 2024 and 1.8 million bpd in 2025.
Near 7:30 AM ET, West Texas Intermediate futures for May delivery were up
$1.12 to trade near $86.14 bbl, and Brent for June delivery gained $1.02 to
$90.76 bbl. RBOB for May delivery was up $0.0387 to $2.8128 gallon, while ULSD
for May delivery traded near $2.7056 gallon, up $0.0458.
Karim Bastati, karim.bastati@dtn.com, www.dtn.com
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