Oil Poised for Weekly Gain Amid Signs of Improving Demand, According to Reuters

By Shariq Khan

Oil prices experienced an uptick during Asian trading hours on Friday, with the global benchmark Brent poised to see its first weekly gain in three weeks. This rise comes amid indications of improving global demand and a slowdown in inflation in the United States, the world’s largest oil consumer.

Brent crude increased by 21 cents, or 0.3%, reaching $83.48 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures rose by 18 cents, or 0.2%, to $79.41 per barrel.

Brent futures are expected to rise approximately 1% for the week, while WTI futures are projected to gain around 1.4%.

A decline in oil and refined products inventories at significant global trading hubs has generated optimism regarding oil demand growth, reversing a trend of increased stockpiles that had previously pressured prices. As of Thursday, Brent crude was down about 10% from this year’s peak of $92.18 per barrel recorded on April 12.

Oil and fuel inventories in the U.S. fell last week, and Singapore’s middle distillate fuel stocks reached a near three-month low this week. In Europe’s Amsterdam-Rotterdam-Antwerp trading hub, gasoline inventories dropped by 7.5% for the week ending Thursday, according to data from a consultancy.

Recent U.S. economic indicators have further fueled optimism about global demand. U.S. consumer prices rose less than anticipated in April, which increased expectations for lower interest rates. This sentiment was strengthened by data showing a stabilizing job market in the U.S.

Lower interest rates could potentially weaken the U.S. dollar, making oil more affordable for investors using other currencies and boosting demand.

"Financial markets are increasingly anticipating a September interest rate cut by the Federal Reserve, which would likely suppress dollar strength and benefit commodities and equities," stated Alex Hodes, an oil analyst at StoneX, on Thursday.