Oil prices saw a slight increase in subdued trading due to public holidays in Britain and the United States. This followed a week marked by concerns over U.S. interest rates amidst persistent inflation.
The Brent crude July contract rose by 76 cents to $82.88 per barrel by 1411 GMT, while the more active August contract increased by 80 cents to $82.64. U.S. West Texas Intermediate (WTI) crude futures climbed by 78 cents to $78.50.
Brent decreased approximately 2 per cent last week. In comparison, WTI saw a nearly 3 per cent decline following the release of Federal Reserve minutes, indicating that certain officials might consider further interest rate hikes if deemed essential to manage persistently high inflation.
“Oil prices have started the session slightly higher, but moves are expected to be in range as the U.S. and U.K. markets close today. However, in the week ahead, prices could see high volatility with the focus on the U.S. fuel demand during the current summer driving season, U.S. oil inventory data due on Wednesday, and the OPEC+ members meeting on 2nd June, where they are expected to roll-over current output cuts till year-end,” said Pranav Mer, Vice President, EBG – Commodity & Currency Research, JM Financial Services Ltd.
What’s weighing on crude oil prices?
- Newly released data from Western economies has altered expectations regarding rate cuts, varying by location.
- Bank of America analysts predicted that the European Central Bank (ECB) may opt for a rate cut in June, contrasting with expectations of prolonged higher rates in the United States. This projection coincides with the anticipation surrounding the U.S. personal consumption expenditures (PCE) index, slated for release on May 31. This index is closely monitored for insights into the Federal Reserve’s interest rate strategies, regarded as its favoured inflation gauge.
- German inflation figures released on Wednesday and euro zone indicators on Friday will be closely monitored for indications of a potential European rate reduction expected by traders in the upcoming week. On Monday, prominent ECB officials stated that despite the evident trajectory, while there is space for interest rate cuts amid decelerating inflation, the bank must proceed cautiously with policy adjustments.
Also read: Gold and silver prices today on 27-05-2024: Check latest rates in your city
- The upcoming online meeting on June 2 will be closely watched. It involves the OPEC group of oil producers, including the Organization of the Petroleum Exporting Countries (OPEC) and its allies, such as Russia. According to sources within OPEC, an extension of output cuts totaling 2.2 million barrels per day is probable.
You are on Mint! India’s #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!
Download The Mint News App to get Daily Market Updates & Live Business News.
Published: 27 May 2024, 09:56 PM IST