Brent Jumps as Oil Market Rallies Ahead of U.S. Supply Data
Global benchmark Brent oil settled at its highest level since late April following several supply cut announcements by OPEC+ members, including Saudi Arabia in recent weeks.
Some analysts believe the recent rise could be a sign that prices are heading even higher, with Brent perhaps moving past $80 a barrel for the first time since April. Due to global economic pressures, the oil market has fallen from its early highs.
Over the next 15 months global crude oil inventories are set to decline, but worries about the global economy and prospects for weaker energy demand are likely to limit any price gains for oil, according to the U.S. Energy Information Administration’s monthly Short Term Energy Outlook released on Tuesday.
“Crude prices are getting a boost as expectations grow for the oil market to remain tight despite all lingering growth concerns. The IEA expects strong demand from China and developing nations. The short-term crude demand outlook shouldn’t be that bad as everyone is taking a vacation that requires some travel this summer,” Edward Moya, Senior Market Analyst, at Oanda wrote in a note Tuesday afternoon.
Investors are also looking ahead to U.S. weekly inventory data from the American Petroleum Institute later Tuesday and the U.S. Energy Information Administration due Wednesday.
On average for the week ended July 7, analysts expect the EIA report to show supply declines of 1 million barrels for crude and 1.1 million barrels for gasoline, while distillate stockpiles are expected to have edged up by 150,000 barrels, according to a survey conducted by S&P Global Commodity Insights.
The U.S. June consumer-price index reading due out Wednesday may offer clues on the outcome of the next Federal Reserve policy meeting on July 25-26 — and the prospects for the U.S. economy.
“While the Fed has indicated that the fight against inflation is still not over, they have recognized the signs of inflation cooling, giving investors’ confidence that few rate hikes could be left,” StoneX’s Kansas City energy team, led by Alex Hodes, wrote in Tuesday’s newsletter.
Economists polled by the Wall Street Journal expect headline inflation to slow to 3.1% year over year and core inflation, which strips out volatile food and energy prices, to slow to 5% year over year. #Brent Jumps as Oil Market Rallies Ahead of U.S. Supply Data#