Crude oil prices have been stuck between bearish and bullish news this week, booking a modest decline over the four days to Thursday.
This could yet change later today, resulting in another week of gains for benchmarks. On the other hand, the bearish sentiment may prevail.
On that side, the focus has been on Chinese demand, which CNPC said this week is about to enter a period of depression. According to the president of CNPC’s research arm, EVs and LNG-powered trucks would displace between 10% and 12% of China’s gasoline and diesel demand in the coming years.
In further bearish news, the U.S. trade deficit for January increased to $67.4 billion, which was substantially higher than expectations, which pegged the deficit at $63.3 billion.
Yet despite this update oil prices rose earlier on Friday, likely driven higher by signals from the Fed that it may soon start to cut interest rates. In comments made on Thursday, Fed’s Chair, Jerome Powell, said that the central bank was “not far” from becoming confident in the economy enough to start cutting rates, Reuters reported.
“We are waiting to become more confident that inflation is moving sustainably down to 2%. When we do get that confidence, and we’re not far from it, it will be appropriate to begin to dial back the level of restriction so that we don’t drive the economy into recession,” Powell said.
The news that Russia’s crude oil exports in the week to March 3 had declined by 230,000 bpd also contributed to the bullish sentiment on oil markets as did the temporary suspension of oil flows along the Keystone pipeline.
TC Energy, the operator of the infrastructure, said it had shut it down as a precautionary measure and the pipeline was once again up and running after the brief suspension.
Early on Friday morning, WTI was up 1.08% at 79.76 while Brent had climbed by 0.87% to 83.68.
By Irina Slav for Oilprice.com
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2024-03-08 08:34:00
