Wednesday, 29 May 2024

Oil declines slightly ahead of US economic data


Oil prices fell slightly in Asian trading in the morning, as uncertainty regarding US economic data issued on Friday clouded the high sentiment about Chinese demand and possible disruptions to Middle East supplies.

By 0415 GMT, Brent crude futures fell 19 cents, or 0.24 percent, to $ 79.08 a barrel, and it had risen about six percent this week

According to “Witters”, US West Texas Intermediate crude fell one cent, or 0.01 percent, to $ 74.36, after rising about eight percent this week.

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Markets are now awaiting spending and inflation data in the United States, which will be issued on Friday, and its impact on the value of the dollar.

“The market may maintain its bullish trend if US personal consumption expenditures today provide positive signs for markets that US inflation is expected to decline further,” said Tina Ting, an analyst at CMC Markets in Auckland.

“The disappointing data may raise concerns about the Federal Reserve’s policy again and limit recent gains,” she added.

Prices rose this week on optimism about the economic recovery in China

China’s manufacturing activity grew in March at a slower pace compared to a record increase in February, but it still exceeded the expectations of economists in a Reuters poll.

Industrial activity in China has become a major price determinant in the past few weeks after the lifting of anti-Corona virus restrictions, amid weak global demand.

Oil prices are heading for gains for the second week in a row after the biggest bank failure since the 2008 financial crisis unnerved traders and roiled markets. Fears of a global banking crisis receded after the rescue of two banks in the United States and Europe

Prices rose more than 1 percent on Thursday, thanks to a drop in US crude stocks and the suspension of exports from the Kurdistan region of Iraq, which relieved pressure from a smaller-than-expected decline in Russian supplies.

Producers closed or reduced production in a number of oil fields in the semi-autonomous Kurdistan region in northern Iraq after the northern export pipeline stopped. More outages are expected in the future

US Energy Information Administration (EIA) said that crude stocks in the United States unexpectedly fell in the week ending March 24, recording the lowest level in two years.