May 10 2024: The global oil benchmark, Brent, surpassed $84 per barrel on Friday, buoyed by encouraging demand indicators from the United States and China, the world’s largest consumers of crude oil. Additionally, ongoing tensions in the Middle East lent further support to oil prices.
By 1314 GMT, Brent futures had climbed 33 cents to reach $84.21 per barrel, while U.S. West Texas Intermediate crude rose by 42 cents to $79.68.
The increase in U.S. crude inventories, driven by higher refinery operations, coincided with reports indicating higher oil imports by China in April compared to the previous year. This uptick in demand comes as China’s exports and imports returned to growth in April following a contraction in the prior month.
Market focus is now turning to upcoming U.S. inflation data, which could influence the Federal Reserve’s approach to interest rates. Meanwhile, there are growing expectations that the European Central Bank will commence rate cuts in June.
In Europe, a Ukrainian drone attack reportedly ignited an oil refinery in Russia’s Kaluga region, adding to geopolitical tensions. Conflict persists in the Middle East, with recent Israeli airstrikes in Gaza highlighting ongoing hostilities in the region.
Despite these geopolitical factors, analysts anticipate a potential easing of oil prices throughout 2024, with Brent averaging around $86 per barrel in the second quarter and decreasing to $74 in the third quarter due to signs of moderating global oil demand growth.
