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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