Oil will recover amid a possible pause in US rate hikes
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Oil prices rose on Thursday, June 1, paring earlier losses, as a potential pause in U.S. interest rate hikes and a vote on the debt ceiling renewed optimism for further growth in fuel demand.
This is reported by Reuters.
How prices have changed
August Brent crude futures were up 55 cents, or 0.76%, at $73.15 a barrel by 06:40 GMT.
U.S. West Texas Intermediate (WTI) crude was up 46 cents, or 0.68%, at $68.55 a barrel.
Both benchmarks fell sharply in the previous sessions, with Brent down 5.6% and WTI down 6.3% as of Wednesday’s close, compared to last Friday.
What affected the prices
US Federal Reserve officials on Wednesday hinted at a potential “skip” for a rate hike in June, reversing market expectations of an imminent hike that could slow economic growth and dampen oil demand.
In addition, the US House of Representatives’ passage of a $31.4 trillion debt moratorium improved the chances of averting a government default.
Demand figures from China, the world’s largest oil importer, are somewhat mixed this week. Industrial activity contracted in May to a five-month low, while services activity grew at its slowest pace in four months.
Instead, China’s Caixin/S&P global purchasing managers’ index (PMI) on Thursday showed an increase to 50.9 in May from 49.5 in April, easing concerns about industrial demand in China.
U.S. crude oil inventories rose by about 5.2 million barrels last week.
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