Oil prices continue to rise amid optimism about the global economy
17 July 08:39
Oil prices rose on Thursday in morning trading, recouping losses from the previous session. This was facilitated by better-than-expected economic performance of the world’s largest oil consumers and signs of easing trade tensions, "Komersant Ukrainian" reports citing Reuters.
According to OilPrice.com, Brent crude oil futures rose 27 cents, or 0.39%, to $68.79 per barrel as of 08:33 Kyiv time. US West Texas Intermediate futures rose 36 cents, or 0.54%, to $66.74. Both benchmarks lost more than 0.2% during the previous session.
U.S. crude oil stockpiles fell by 3.9 million barrels last week to 422.2 million barrels, the Energy Information Administration reported on Wednesday. This is a bigger decline than the forecasted 552 thousand barrels, indicating increased activity of refineries, reduced supply and increased demand.
“There is some support from the favorable margin environment associated with the refining sector. Refined product spreads remain relatively wide across all regions,”
– said John Pacey, President of Stratas Advisors.
However, larger-than-expected gasoline and diesel stockpiles have limited price increases.
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The latest economic review by the US central bank, released on Wednesday, showed a pickup in activity in recent weeks. However, the outlook was “neutral to somewhat pessimistic” as businesses reported that higher import tariffs are putting pressure on price increases.
Data from China showed growth slowed in the second quarter, but not as much as previously expected, partly due to advance purchases to avoid U.S. tariffs, which eased concerns about the state of the world’s largest oil importer.
The data also showed that China’s crude oil refining in June was up 8.5% year-on-year, indicating stronger demand for fuel.
“Support came from positive news of some easing of trade tensions between China and the United States, with President Trump lifting the ban on AI chip sales to China along with the announcement of a trade deal with Indonesia,”
– John Pacey added.
US President Donald Trump has expressed fresh optimism about the prospects for a drug deal with Beijing. He also hinted that a trade deal with India is very close, and that an agreement may be reached with Europe.
Trade tariffs could slow global economic growth and thus reduce fuel demand, putting downward pressure on prices.
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