2024-02-29 21:46:52
Oil fell with the release of US inflation data and an increase in OPEC production
Oil prices fell on Thursday following US inflation data indicated a slowdown in price increases in the world’s largest economy, which might mean a decline in demand for crude, at a time when rising OPEC production is also pressuring prices.
Brent crude futures for April fell six cents to $83.62 a barrel at settlement. US West Texas Intermediate crude futures also fell 28 cents to $78.26 per barrel.
Data on the Personal Consumption Expenditures index, the Federal Reserve’s preferred measure of inflation, showed that January inflation was in line with economists’ expectations, keeping expectations of an interest rate cut in June alive.
Consumer and producer price reports earlier in February indicated continued inflation, with a cautious approach by US Federal policymakers, making investors expect interest rate cuts to be delayed until June from March.
Data from some of the largest economies in the euro zone showed that inflation there recorded a further decline this month, strengthening the European Central Bank’s position to start cutting interest rates later this year.
High interest rates helped many major Western economies reduce inflation, but this led to a decline in economic growth and demand for oil.
As for supplies, official data showed on Wednesday that crude oil inventories in the United States, the world’s largest producer, rose for the fifth week in a row, with an increase of 4.2 million barrels, exceeding expectations for an increase of 2.7 million barrels.
Extending the voluntary oil production cuts from the OPEC+ group is also still on the table.
A survey conducted by Reuters showed that the Organization of the Petroleum Exporting Countries (OPEC) pumped 26.42 million barrels per day this month, an increase of 90,000 barrels per day from January. Libya’s production rose on a monthly basis by 150,000 barrels per day.
Meanwhile, the price of global benchmark Brent crude has been hovering comfortably above $80 for three weeks, and the conflict in the Middle East has had little impact on crude oil flows.
(Reuters, Al-Arabi Al-Jadeed)
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