9th May 2024 – On Thursday, oil prices experienced a moderate increase in early trading, driven by a decrease in U.S. crude inventories and growing optimism about potential interest rate cuts by the Federal Reserve. Brent crude for July delivery climbed by 23 cents to $83.81 a barrel, while U.S. West Texas Intermediate crude for June was up 29 cents at $79.28 per barrel.
Picture: Oil prices on the rise as seen on VT Markets trading app.
The latest data from the Energy Information Administration (EIA) revealed that U.S. crude inventories fell by 1.4 million barrels last week, reaching 459.5 million barrels. This decline was more observable than the 1.1 million-barrel draw anticipated by analysts in a Reuters poll. The drop in stock levels is largely attributed to increased refinery activity, signalling tighter supply conditions in the market.
Despite the overall decrease in crude inventories, rising gasoline stocks, which unexpectedly increased by over 900,000 barrels to 228 million barrels, have tempered further price increases. This rise in gasoline reserves suggests a somewhat mixed picture in terms of oil demand and supply dynamics.
Market sentiments were also influenced by expectations that the U.S. central bank might reduce interest rates by the end of the year following weaker-than-expected U.S. jobs data. Lower interest rates typically lead to increased spending and investment, potentially boosting demand for crude oil.
Additionally, geopolitical developments have played a role in shaping oil prices. Earlier this week, the U.S. indicated that negotiations regarding a ceasefire in Gaza were progressing, which could help to close gaps between Israel and Hamas.
As oil prices respond to shifts in U.S. inventory levels, Federal Reserve interest rate policies, and geopolitical developments, strategic opportunities arise for informed traders. Understanding these market dynamics can position you to capitalise on potential price movements and enhance your trading portfolio.
Start trading today. Click here to open a live account with VT Markets.
Official partners:
