Crude Oil News Today: Set for Weekly Gain Amid Improving Global Demand

James Hyerczyk
Updated: May 17, 2024, 13:04 GMT+00:00

Key Points:

  • Brent futures rise 1% weekly, WTI gains 1.4%.
  • U.S. inflation data suggests potential interest rate cuts soon.
  • China's industrial output increases, boosting demand outlook.
Crude Oil News Today

In this article:

Oil Prices Edge Higher on Improved Demand Prospects

Oil prices are higher on Friday, with Brent set for its first weekly increase in three weeks, driven by signs of improving global demand and easing inflation in the United States. Brent futures are poised to rise about 1% this week, while WTI futures are set to gain 1.4%.

At 10:24 GMT, Light Crude Oil Futures are trading $78.83, up $0.09 or +0.11%.

Demand Optimism and Inventory Declines

Recent declines in oil and refined product inventories at major global trading hubs have sparked optimism about oil demand growth. This reverses the trend of rising stockpiles that had previously pressured crude oil prices. As of Thursday, Brent crude futures were down around 10% from their peak of $92.18 a barrel on April 12.

U.S. Economic Indicators Boost Sentiment

Economic indicators from the United States have fueled optimism over global demand. U.S. consumer prices rose less than expected in April, which has raised expectations of lower interest rates. This expectation was further supported by data indicating a stabilizing U.S. job market. Lower interest rates could weaken the U.S. dollar, making oil cheaper for investors holding other currencies and boosting demand.

China’s Industrial Output and Russian Supply Concerns

China’s industrial output increased by 6.7% year on year in April, accelerating from 4.5% in March, indicating a recovery in its manufacturing sector and potential stronger future demand. Additionally, disruptions in Russian oil infrastructure, such as the recent Ukrainian drone attack on the Tuapse oil refinery, have also contributed to price support.

OPEC+ Meeting and Market Outlook

Investors are now looking ahead to the OPEC+ meeting on June 1 for further direction. With two consecutive weeks of declines in U.S. crude stockpiles and expectations of additional economic stimulus measures from China, analysts are optimistic. Financial markets have placed significant bets on a September interest rate cut by the Federal Reserve, which could further support commodity prices.

Market Forecast: Bullish Outlook

Given the improving demand indicators from the U.S. and China, alongside inventory declines and potential monetary easing, the short-term outlook for crude oil prices appears bullish. Traders should monitor upcoming economic data and OPEC+ decisions, as these factors will likely influence market sentiment and price movements.

Daily Light Crude Oil Futures

Light crude oil futures are poised for a slight weekly gain, having moved above the 200-day moving average at $78.20 earlier this week. This indicator now acts as support.

The market is still in the base-building stage, but this chart pattern suggests a potential breakout to the upside. However, gains may be limited by the 50-day moving average at $80.94.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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