Oil Prices Gain Momentum Amidst Growing Demand from Top Consumers

Oil prices experienced an upward trajectory on Friday, buoyed by robust demand from the United States and China, the world’s leading oil consumers. This surge coincides with a positive signal from the Federal Reserve, indicating potential interest rate cuts.

Brent Crude Futures Surge

Brent crude futures saw a notable increase of 0.45 percent, equivalent to 37 cents, reaching $83.32 a barrel by 0110 GMT. Similarly, US West Texas Intermediate crude futures rose by 0.61 percent, or 48 cents, to $79.44.

Encouraging Data from the Energy Information Administration

Data released by the Energy Information Administration (EIA) revealed a significant decline in gasoline and distillate stocks in the United States. Gasoline stocks plummeted by 4.5 million barrels last week, surpassing expectations, while distillate stocks recorded a decline of 4.1 million barrels. These reductions underscore strong demand trends in the market.

Demand Growth in China and India

In China, crude oil imports surged by 5.1 percent in the first two months of 2024 compared to the previous year, indicating robust demand. Concurrently, fuel consumption in India witnessed a noteworthy increase of 5.7 percent year-on-year in February. This growth was fueled by vibrant factory activity in India, which stands as the world’s third-largest oil importer and consumer.

Market Outlook

The confluence of growing demand from major consumers, coupled with supportive market indicators such as declining inventories and positive economic signals, paints a bullish outlook for oil prices in the near term. However, market participants remain vigilant, closely monitoring geopolitical developments and supply dynamics for potential shifts in market sentiment.