Crude oil falls as a result of profit-taking after hitting $85 in price
Although oil prices somewhat decreased on Friday, they were still expected to climb by about 4% this week due to many factors, including dramatic drops in U.S. gasoline and crude supplies, drone attacks on Russian facilities, and higher-than-expected estimates for energy consumption. May Brent crude oil futures slid 41 cents, or 0.5%, to $85.01 a barrel at 1234 GMT on Thursday, after their first close over $85 a barrel since November. West Texas Intermediate (WTI) oil for the United States dropped 32 cents, or 0.4%, to $80.94 in April.
For the fourth time since November, the International Energy Agency upgraded its forecast for the rise of the oil demand in 2024 on Thursday after Houthi strikes impeded transportation across the Red Sea. 1.3 million barrels of oil will be used globally in 2024, according to the IEA’s most recent assessment, an increase of 110,000 barrels from the previous month. After OPEC+ members extended cutbacks, it predicted a minor supply shortfall this year as opposed to a surplus last year. A second day of intense drone assaults by Ukraine on Russian oil facilities supported oil prices as well. On Wednesday, the largest refinery owned by Rosneft caught fire, marking one of the worst attacks against Russia’s energy industry in recent memory.
According to the Energy Information Administration (EIA) on Wednesday, U.S. crude oil stocks unexpectedly decreased last week as refineries increased processing, while gasoline inventories plummeted as demand increased. When China’s central bank rolls over expiring medium-term loans on Friday, it is anticipated to maintain a key policy rate unaltered, according to a Reuters poll.
Reduced interest rates save consumers’ borrowing expenses, which may increase demand for oil and spur economic development. A larger-than-expected gain in producer prices last month was indicated by other statistics released on Thursday, suggesting that the Federal Reserve in the United States was unlikely to start lowering interest rates until June despite some indications of slowing economic activity.
