Energy
Thursday, July 11th, 2024 1:55 pm EDT
Key Points
- Crude oil futures saw an increase on Thursday, driven by a decline in inflation that raised expectations of potential interest rate cuts by the Federal Reserve later this year. The consumer price index fell by 0.1% from May to June, bringing the annual inflation rate to 3%, nearing its lowest level in over three years according to the Department of Labor.
- Energy prices showed varied movements:
- West Texas Intermediate (WTI) crude oil for August delivery rose to $82.47 per barrel, up by 37 cents or 0.45%, with a year-to-date gain of 15%.
- Brent crude for September delivery increased to $85.26 per barrel, up 18 cents or 0.21%, showing a year-to-date rise of 10.7%.
- RBOB gasoline futures for August were at $2.51 per gallon, up 1 cent or 0.44%, with gasoline up 19.6% year-to-date.
- Natural gas prices for August decreased to $2.29 per thousand cubic feet, down 4 cents or 1.80%, marking a year-to-date decline of 9%.
- The market anticipates the Federal Reserve will initiate interest rate cuts in September, a move typically stimulating economic growth and potentially increasing crude oil demand. Despite mixed signals on global oil demand, highlighted by the International Energy Agency’s report of eased growth to 710,000 barrels per day year-on-year in the second quarter due to reduced consumption in China, contrasting forecasts from OPEC suggest robust demand growth of 2.2 million barrels per day, driven by anticipated solid global economic growth of 2.9% in 2024.
In a market response reflecting economic indicators, crude oil futures climbed on Thursday as inflation data showed a decline, fueling expectations of potential interest rate cuts by the Federal Reserve. The consumer price index registered a 0.1% decrease from May to June, stabilizing the annual inflation rate at 3%, a level not seen in over three years according to the Department of Labor.
West Texas Intermediate (WTI) crude oil for August delivery rose to $82.47 per barrel, up by 37 cents, marking a 0.45% increase. Similarly, Brent crude for September delivery edged up 18 cents to $85.26 per barrel, a 0.21% rise. RBOB gasoline futures for August stood at $2.51 per gallon, showing a 0.44% increase, while natural gas prices for August dropped by 4 cents to $2.29 per thousand cubic feet, a decrease of 1.80% year to date.
The energy market’s optimism stemmed from expectations that the Federal Reserve may initiate interest rate cuts starting in September, a move that typically stimulates economic growth and subsequently increases crude oil demand. Despite mixed signals on global oil demand, with the International Energy Agency (IEA) reporting a slowdown in growth to 710,000 barrels per day (bpd) year-on-year in the second quarter, primarily due to reduced consumption in China, market sentiment remained buoyed.
Looking ahead, the IEA projects global oil demand growth to average just below 1 million bpd in 2024, influenced by moderate economic expansion, enhanced energy efficiency measures, and the increasing adoption of electric vehicles. In contrast, OPEC forecasts a robust demand growth of 2.2 million bpd, expecting solid global economic growth of 2.9% this year. The disparity in outlooks between the IEA and OPEC underscores uncertainties in the oil market amidst varying economic forecasts and shifting global energy dynamics.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/07/11/crude-oil-prices-today.html
