Oil prices hold firm as stocks fall and US inflation eases

Oil prices have remained fairly static this week, as a softer U.S. dollar, declining U.S. inventories, and increased Chinese stimulus measures have raised hopes of improving demand.

However, crude markets have been grappling with mixed signals this week. A major industry body lowered its demand forecast for the year, tempering optimism. Persistent economic uncertainty surrounding top oil importer China has also sparked some volatility, especially after the U.S. imposed higher trade tariffs on Beijing.

Oil prices picked up after softer-than-expected U.S. consumer inflation data. The weaker inflation readings battered the U.S. dollar and raised bets that the Federal Reserve could start cutting rates as soon as September, which would be positive for crude demand.

On the other hand, OPEC maintained its demand forecast for 2024, citing an eventual economic recovery in China and potentially lower interest rates later in the year. OPEC is also expected to extend its current production cuts beyond the end of June, presenting a tighter supply outlook.

Investors will be closely watching China’s industrial production and retail sales data due later on Friday for more insight into the world’s biggest oil importer’s economic conditions and the potential impact on oil demand.

In its latest monthly report, the IEA revised its demand outlook by 140,000 barrels daily, to a total 1.1 million bpd in new demand this year. The agency cited weak demand in developed countries.

Fuel cards users can expect a slight fall in the region of .50 pence per litre for next week.


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