Oil prices fell slightly on Thursday due to anticipation of delayed U.S. interest rate decreases, despite positive Chinese trade data indicating strong demand.
Brent crude prices fell 0.4% to $82.62 a barrel, while U.S. West Texas Intermediate crude futures down 0.3% to $78.84.
Oil prices fell after reaching a near-2024 high on Wednesday, boosted by data from the United States revealing lower-than-expected oil stocks and fuel inventories, indicating strong demand.
However, market attitude reversed amid speculation that the US Federal Reserve might postpone its first interest rate cut until the later half of the year.
According to a Reuters survey of foreign exchange analysts, such a delay might boost the US dollar, affecting demand for dollar-denominated oil among purchasers who use other currencies.
Federal Reserve Chair Jerome Powell’s remarks on Wednesday regarding the uncertain trajectory of inflation added to market concern.
Despite the uncertainties, the Fed still intends to lower its benchmark interest rate this year.
In contrast, China’s import and export growth exceeded estimates, indicating a possible turnaround in global trade and providing an optimistic picture for officials seeking to boost economic recovery.
Chinese customs data reported a 5.1% rise in imports during the first two months of 2024 compared to the previous year, totaling around 10.74 million barrels per day.
“China’s trade balance data is a positive sign for the oil market’s demand outlook,” Auckland-based independent analyst Tina Teng said.
However, she added that risk-off sentiment dominated financial markets as equities fell on Wall Street.
On Wednesday, data revealed that oil stocks increased for the sixth week in a row, by 1.4 million barrels, or around two-thirds of the 2.1 million-barrel increase predicted in a Reuters poll.
The EIA also reported that petrol and distillate stockpiles declined more than predicted.
Additional reporting by Florence Tan in Singapore and Arathy Somasekhar in Houston, with editing by Emelia Sithole-Matarise and Jason Neely.
Source: Allnews.ng