On Thursday, oil prices rose 3% to a one-week high as the US currency weakened and new data showed an increase in refinery operations in China, the world’s largest crude importer. By 1:00 p.m. EDT (1700 GMT), Brent futures were up $2.07, or 2.8%, to $75.27 per barrel and even surged to trade at $75.66 at the time of writing., while US West Texas Intermediate (WTI) oil was up $2.00, or 2.9%, to $70.27 and at the time of writing, it is trading at $70.811.
With that, Brent and WTI are poised to close at their highest levels since June 8. The gasoline crack spread, a gauge of refining profit margins, increased to its highest level since July 2022 in the United States as a result of a larger percentage increase in gasoline futures. Meanwhile, US diesel futures increased by about 5% to reach their highest level since late April.
US data that retail sales unexpectedly increased in May and higher-than-expected jobless claims last week caused the dollar to drop to a five-week low against a basket of other currencies provided support for the oil market.
Oil becomes more affordable for owners of other currencies when the dollar declines, which could increase demand. The throughput of China’s oil refineries increased by 15.4% in May compared to a year earlier, reaching its second-highest level ever, according to data released on Thursday.
The second half of the year could see continued growth in Chinese demand for oil, according to the CEO of Kuwait Petroleum Corp. The fact that China’s industrial output and retail sales growth in May fell short of expectations, however, weighed on the economy’s outlook. Fears that rising interest rates would weaken the economy of the United States and Europe and decrease demand for oil also restrained price increases.
As predicted, the European Central Bank (ECB) increased interest rates on Thursday to a 22-year high. In order to combat the strong inflation, it indicated more policy tightening. “The outlook for economic growth and inflation remains highly uncertain,” ECB President Christine Lagarde stated. The US Fed held interest rates constant on Wednesday but hinted that they might rise by at least 0.5 percentage points by year’s end.
Analysts anticipate that OPEC+, OPEC, and allies will undertake voluntary reductions in crude supply starting in May. Around 1.5 million barrels per day (bpd) of a supply imbalance are anticipated in June, and more than 2 million bpd in July. We anticipate that oil prices will trend higher once these gaps in on-land oil stockpiles are apparent, the bank wrote in a note.
Basim Mohammed, the deputy oil minister for upstream issues in Iraq, told Reuters that a Turkish energy delegation will meet with Iraqi oil authorities in Baghdad on 19 June to discuss the restart of the country’s northern oil shipments.
Following an arbitration decision by the International Chamber of Commerce (ICC), Turkey stopped the 450,000 bpd of northern shipments from Iraq that were passing through the Iraq-Turkey pipeline on March 25.
A supply deficit of around 1.5 million barrels per day (bpd) is expected to materialize in June and more than 2 million bpd in July. Once these deficits become visible in on-land oil inventories, we expect oil prices to trend higher,” the bank said in a note.
In other supply news, a Turkish energy delegation will meet Iraqi oil officials in Baghdad on June 19 to discuss the resumption of Iraq’s northern oil exports, Iraqi deputy oil minister for upstream affairs, Basim Mohammed, told Reuters.
Turkey halted Iraq\u2019s 450,000 bpd of northern exports through the Iraq-Turkey pipeline on March 25 after an arbitration ruling by the International Chamber of Commerce (ICC).<\/p>\n","protected":false},"excerpt":{"rendered":"
On Thursday, oil prices rose 3% to a one-week high as the US currency weakened and new data showed an increase in refinery operations in China, the world’s largest crude importer. By 1:00 p.m. EDT (1700 GMT), Brent futures were up $2.07, or 2.8%, to $75.27 per barrel and even surged to trade at $75.66 …<\/p>\n","protected":false},"author":13,"featured_media":77220,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[6827,49],"tags":[7156,6832,7123,6923,6885,7082,8422,6846,7095,6909],"class_list":["post-85432","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-daily-economic-reports","category-economic-reports","tag-brent","tag-china","tag-demand","tag-ecb","tag-fed","tag-iraq","tag-kuwait","tag-oil","tag-turkey","tag-wti"],"_links":{"self":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/85432","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/comments?post=85432"}],"version-history":[{"count":2,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/85432\/revisions"}],"predecessor-version":[{"id":85448,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/85432\/revisions\/85448"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media\/77220"}],"wp:attachment":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media?parent=85432"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/categories?post=85432"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/tags?post=85432"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}