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Oil poised for weekly gain on rising demand

May 17, 2024

Key points:

  • Oil prices rise on improving demand signals from China and the US.
  • Brent crude and WTI crude futures are set for weekly gains.

Oil prices increased on Friday, with global benchmark Brent set for its first weekly gain in three weeks due to signs of improving demand from key consumers China and the United States.

Picture: Oil prices on the rise as seen on VT Markets app.

Brent and WTI crude futures edge higher

Brent crude oil prices rose by 21 cents, or 0.25%, to $83.48 a barrel by 0314 GMT. U.S. West Texas Intermediate (WTI) crude futures increased by 7 cents, or 0.09%, to $79.30 a barrel. Brent futures are set to climb about 1% for the week, while WTI futures are set to rise 1.4%.

Markets were also buoyed by China’s industrial output growth of 6.7% year-on-year in April, indicating a recovery in its manufacturing sector and suggesting stronger future demand.


Also read: China Manufacturing Due for Review, More US PMI Data 

Falling inventories at global hubs boost oil demand outlook

Declining inventories of oil and refined products at major global trading hubs have also fueled optimism about oil demand growth, reversing the trend of rising stockpiles that had previously pressured crude oil prices.

Recent U.S. economic indicators have contributed to the positive outlook for global demand. U.S. consumer prices rose less than expected in April, boosting expectations of lower interest rates. Additionally, data released on Thursday showed a stabilising U.S. job market.

Lower interest rates could weaken the U.S. dollar, making oil cheaper for investors holding other currencies and driving demand.

OPEC+ meeting anticipated to influence medium-term oil prices

On the supply side, investors are looking for direction from the upcoming OPEC+ meeting on June 1, likely to be held online. 

Oil prices remain sensitive to supply and demand dynamics, with key economic indicators and policy decisions continuing to shape the market outlook. Traders should monitor upcoming economic data and policy announcements for further insights.

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