Oil Prices Set to End: Oil prices appeared to be ending a seven-week gaining trend on Friday. China’s faltering economy and US interest rate hikes looked to balance weaker supplies. This suggested oil prices were likely to finish a seven-week uptrend.
Friday showed just slight improvements. After the latest move, a barrel of West Texas Intermediate (WTI) oil in the US rose 22 cents, or 0.3%, to $80.61. The price of Brent crude rose 8 cents, or 0.1%. Brent crude rose 0.1% to $84.12 at 06:11 GMT.
This year, both standards won seven weeks in a row, a major accomplishment. Brent futures increased 18% in the seven weeks ending August 11, while WTI futures rose more than 20% and hit their highest level in several weeks. Both prices peaked in a few months. Both averages dropped more than 3% this week, erasing some of the gains from the week before.
The US Federal Reserve is cutting inflation amid good economic indicators. This has limited oil price increases. Because of this, oil prices are stable. Oil prices have risen significantly in recent weeks. Because people worry about future oil supplies. This spike was due to less oil stockpiles than expected.
In a Thursday U.S. Department of Labor survey, fewer people were seeking for unemployment benefits. The report contained this. This means the job market may remain competitive for a while, making it tougher for the Fed to slow the economy.
This announcement followed several other good economic indications earlier in the week. These signs included US retail sales numbers. These signs suggest the Federal Reserve may need to maintain high interest rates. This matches other indications directing this route.
Investors worry that rising borrowing costs could impede economic growth and reduce spending, which would affect oil demand. China, the world’s second-largest oil consumer behind the U.S., has lost steam since the second quarter. China uses the most Asian oil. These new discoveries make these fears more serious.
The global financial markets have shaken due to China’s economic instability in recent months. Because the real estate market is unstable and could spread, investors are especially worried.
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However, OPEC and its partners (OPEC+) have reduced oil output, reducing the market supply. Due to this plus the fact that more individuals are traveling and creating businesses in the US, demand has increased, raising prices. Market researchers expect this to rise in the next days and weeks.
On Friday, ANZ Research reported that oil output in the US has helped offset OPEC and its allies’ cuts, even if the number of oil rigs has decreased, suggesting that this benefit may be temporary. Even though the decline in US oil rigs showed this help might be brief, this study was done.
This week, US crude oil stockpiles fell 6 million barrels. This is because more oil is shipped and refined. The material was released this week. The weekly product supply, which can be used to replace demand, reached a level not seen since December. This was the best since December. Interesting that China’s crude oil inventories ran out swiftly in July despite signals of a weakening economy. No other move like this had been tried in 33 months. This was the first change.
Several momentum signals indicate less goods on the market. Researchers at ANZ revealed that investors are betting more bullishly. This created a yearly high in net-long positions.
Our Reader’s Queries
What is the forecast for oil prices?
According to a recent survey of 34 economists and analysts, the average forecast for Brent crude in 2024 is $82.56. This is a decrease from the consensus of $84.43 in November. Interestingly, only one contributor predicted prices to exceed $90 next year.
How long until oil prices go down?
Despite the cuts that were announced, our forecast for the Brent price in 2024 has been lowered. We anticipate that the Brent spot price will average $83/b next year, which is a decrease from our previous forecast of $93/b in last month’s STEO.
What is the oil price forecast for 2024?
According to the EIA, the global benchmark Brent crude is predicted to have an average price of $82 per barrel in 2024 and $79 in 2025. These figures are similar to the 2023 average of $82.
What is going on with oil prices today?
As of 9 a.m. ET today, the WTI futures are trading at $71.25 per barrel, which marks a 2.92% decrease in the past 24 hours.