Crude oil prices rise as top consumers increase demand

The world’s largest oil consumers, China and the United States, saw rising demand on Friday, which contributed to an increase in oil prices. Additionally, the U.S. Federal Reserve signaled favorably that rate cuts might be possible. The price of a barrel of Brent crude futures had increased by 0.45%, or 37 cents. U.S. West Texas Intermediate oil futures increased by 48 cents, or 0.61%, to $79.44.

The Energy Information Administration reported that last week saw a 4.5 million barrel drop in petrol stocks and a 4.1 million barrel drop in distillate stockpiles in the United States. In an indication of high demand, both dropped more than anticipated.

In the first two months of 2024, China saw a 5.1% increase in crude oil imports compared to the same period last year, while India, the world’s third-largest oil importer and consumer, saw a 5.7% year-over-year increase in fuel consumption in February due to robust industrial activity.

According to a note from Capital Economics, China’s imports of crude oil increased by 3.3% annually after taking into account the extra day in February this year. This gain was consistent with forecasts of higher demand for the year.

“However, that growth will be significantly less than in 2023 when the lifting of zero-covid restrictions caused a spike in activity in the travel and transport sectors,” the note stated. Leading U.S. economist stated on Thursday that the Federal Reserve was “not far” from having sufficient evidence of declining inflation to start lowering interest rates, which helped to prop up oil prices.

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