Oil prices reach a four-month high and hold steady

Shafaq News/ Oil prices dipped slightly on Friday but were poised to register a nearly 4% increase for the week, fueled by significant drops in U.S. crude and fuel inventories, drone strikes on Russian refineries, and an uptick in energy demand projections.

Brent crude oil futures for May fell 41 cents, or 0.5%, to $85.01 a barrel at 1234 GMT, after crossing $85 a barrel for the first time since November on Thursday. U.S. West Texas Intermediate (WTI) crude for April fell 32 cents, or 0.4%, to $80.94.

The International Energy Agency raised its 2024 oil demand growth outlook for the fourth time since November on Thursday, citing Houthi attacks disrupting Red Sea shipping.

The IEA's latest report forecasts a 1.3 million bpd increase in global oil demand for 2024, up 110,000 bpd from the previous month, with a projected supply shortfall this year following OPEC+ members' decision to extend production cuts.

Additionally, Ukraine's drone strikes on Russian oil refineries, including a significant incident at Rosneft's largest refinery, have further bolstered oil prices.

Unexpected declines in U.S. crude oil inventories last week, coupled with a drop in gasoline stocks due to rising demand, were reported by the Energy Information Administration on Wednesday.

On the demand side, China's central bank is anticipated to maintain its key policy rate during the rollover of maturing medium-term loans on Friday, as per a Reuters survey.

Lower interest rates can reduce consumer borrowing costs, potentially stimulating economic growth and oil demand. Despite some indications of a slowdown in U.S. economic activity, the Federal Reserve is unlikely to initiate interest rate cuts before June, with recent data revealing a higher-than-expected surge in producer prices last month.

Source: Reuters