increase in global oil prices; Brent oil crossed the $86 mark
reported by Mehr News Agency, following the reduction of inflationary pressures in the United States, on Friday the price of Brent oil futures increased by 72 cents, equivalent to 0.8% to 86.12 dollars per barrel and the price of West Texas Intermediate crude oil at 85 cents or a one percent increase to $83.47 per barrel.
Brent futures were expected to drop about 1 percent week-on-week after four weekly gains. West Texas Intermediate futures were broadly flat on a weekly basis.
Investor confidence was boosted after data on Thursday showed that US consumer prices fell in June, boosting hopes that the Federal Reserve will soon cut interest rates. Lower rates are expected to boost economic growth, which will help boost fuel consumption.
However, the market is still waiting for clearer signs of action. While Jerome Powell acknowledged the recent improvement in price pressures, he told lawmakers that more data is needed to bolster the case for rate cuts.
Cooling U.S. inflation numbers may support an earlier-than-expected start to tapering by the Federal Reserve, but could also lead to a series of downside surprises, economists said. In the US economic data, he adds that it points to the obvious weakening of the US economy.
Government statistics showed on Wednesday that US gasoline demand reached 9.4 million barrels per day in the week ending July 5, the highest level since 2019. Demand for jet fuel based on a four-week average was at its highest level since January 2020.
Strong demand for the fuel encouraged US refiners to ramp up activity and draw from crude oil reserves. Net crude input from US Gulf refineries rose to more than 9.4 million barrels per day last week for the first time since January 2019, government data showed.
But signs of weaker demand from China, the world’s largest oil importer, could counter the U.S. outlook and weigh on prices.
