Energy
Friday, February 16th, 2024 6:49 pm EDT
Key Points
- Crude oil futures are on track for a weekly gain despite concerns about inflation in the U.S. and uncertain demand outlooks for the year. West Texas Intermediate (WTI) crude for March rose to $78.47 a barrel, and April Brent futures climbed to $83.20, reflecting a 2% increase for the week.
- Escalating tensions in the Middle East, particularly between Israel and Lebanon, are contributing to the rise in oil prices. Israel’s airstrikes in southern Lebanon, in retaliation for rocket attacks from northern Israel, have raised fears of broader conflict in the region. Additionally, Israel’s offensive in Gaza has increased tensions with Egypt.
- Despite stubborn inflation in the U.S. and murky demand forecasts, the oil market remains resilient. While wholesale prices rose more than expected in January and consumer prices were higher than anticipated, traders are cautious about interpreting this data, especially after recent price fluctuations. The conflicting demand forecasts from the International Energy Agency (IEA) and OPEC further contribute to market uncertainty, with differing projections complicating predictions about global oil consumption.
Crude oil futures are experiencing a weekly gain driven by escalating tensions in the Middle East, despite concerns about inflation in the U.S. and uncertain demand projections. West Texas Intermediate (WTI) crude for March rose to $78.47 a barrel, while April Brent futures climbed to $83.20. Speculative traders are capitalizing on geopolitical uncertainties, particularly regarding border conflicts between Israel and Lebanon, which raise fears of wider regional conflicts involving Iran-aligned Hezbollah. Additionally, Israel’s offensive in Gaza has heightened tensions with Egypt. Despite persistent inflation in the U.S., with wholesale and consumer prices exceeding expectations, there is little expectation of imminent interest rate cuts by the Federal Reserve. Traders are cautious, considering recent price fluctuations based on consumer price data. Moreover, oil prices rallied despite a weak global demand forecast for 2024 from the International Energy Agency (IEA). While the IEA anticipates a slowdown in demand growth, OPEC forecasts a tighter market, leading to conflicting estimates. This disparity in demand projections presents challenges for predicting medium- to long-term oil consumption trends, reflecting the complexity and uncertainty surrounding global oil markets.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/16/crude-oil-today.html
