Brent Price Hits $86 as Oil Market Rallies
Brent price hit $86 per barrel as the global oil market rallied on Friday, consolidating on its previous day strength that pushed energy costs upward.
Prices surged despite concern over demand outlook in China, a negative expectation that was upturned by demand outlook in the United States, the world largest consumer of crude oil.
International benchmark Brent crude traded at $86.03 per barrel up 0.73% from the closing price of $85.4 per barrel in the previous trading session.
American benchmark West Texas Intermediate (WTI) traded at $83.39 per barrel, a 0.93% rise from the previous session when it closed at $82.62 per barrel.
Yesterday, oil prices edged higher, supported by a weaker-than-expected US consumer price index (CPI) print, which has boosted expectations of a Federal Reserve rate cut in September.
US consumer price index (CPI) fell by 0.1% on a monthly basis in June, while it increased by 3% on an annual basis, remaining below market expectations, according to the data released on Thursday.
On a monthly basis, the CPI fell for the first time since May 2020, while annual inflation fell to the lowest level in the last year. In the same period, gasoline prices also fall by 3.8% month-on-month and 2.5% year-on-year.
Analysts stated that the data, which indicates that the disinflation trend continues in the country, increased expectations that the Fed will start rate cuts soon.
Low interest rates support a lower US dollar, making oil cheaper for holders of other currencies. Meanwhile, escalating geopolitical tensions in the Middle East, home to a vast majority of global oil reserves, despite ongoing cease-fire negotiations, continue to support upward price movements.
An Israeli warplane targeted a gathering in the city of Khan Younis, southern Gaza Strip, Anadolu learned from on late Thursday.
Witnesses said the fighter jet bombed a crowd of citizens near the Abu Hamid roundabout, resulting in an unspecified number of casualties.
However, the statements of US President Joe Biden indicating that he is determined to broker an end to Israel’s ongoing war on the besieged Gaza Strip on Thursday limited further price rises by easing market players’ supply concerns.
The US Energy Information Administration (EIA) data released Wednesday, gasoline demand in the US was recorded as 9.4 million barrels per day (bpd) in the week ended July 5.
The data suggested a strong demand for fuel in the US, the world’s largest oil consumer, in the travel-heavy summer vacation season and supported upward price movements. #Brent Price Hits $86 as Oil Market Rallies
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