Oil prices climbed on Thursday, with the Brent benchmark rising above $85 a barrel, driven by hopes of interest rate cuts in the United States. The surge followed data revealing a slowdown in US inflation, reinforcing the view that disinflation is back on track. This positive economic news suggests that the Federal Reserve may be closer to cutting interest rates.
Lower interest rates could boost consumer demand, potentially leading to increased oil consumption. However, global oil demand remains uncertain. The IEA predicts slower growth in the second quarter, primarily due to a decline in Chinese consumption. Despite these concerns, OPEC maintained its forecasts for world oil demand growth in 2023 and 2024.
The recent increase in oil prices is also attributed to a decrease in US crude and gasoline stocks, as reported by the EIA. The future trajectory of oil prices will depend on factors like US monetary policy, global economic growth, and geopolitical events.