Global oil prices on course for first weekly rise ahead of EPRA review
Oil prices edge up to one-week high on rising demand hopes in several weeks after China, US data
Oil prices edge up to one-week high on rising demand hopes in several weeks after China, US data.
Global oil prices started moving higher early on Friday, set to book their first weekly gain in several weeks.
This is after China reported growth in exports and imports, and ceasefire talks between Israel and Hamas broke down.
China reported a 5.45% increase in crude oil imports specifically for last month, equal to a daily rate of 10.88 million barrels. This was lower than the March average, which stood at 11.55 million bpd but was still strong enough to warrant a change in sentiment among traders.
One reason for that was the news that the latest round of ceasefire talks between Hamas and Israel had failed to produce a deal, with Israel bombing Rafah despite warnings from Washington not to do it.
Separately, the latest weekly U.S. jobs report showed new unemployment benefit claims hit an eight-month high, fueling hopes of rate cuts despite recent indications from Fed officials they were going to take their time with the cuts. These hopes also helped oil prices tick higher.
OPEC+ meanwhile signaled it had no intention of changing its production policy at the next group meeting on June 1.
While the update was not really unexpected, especially with the latest decline in prices despite the continued cuts, it did highlight the significance of OPEC policies for global supply dynamics.
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“The crude oil market will remain beholden to OPEC supply policies,” ANZ analysts said in a note as quoted by Bloomberg. “Ongoing curtailments should support prices, but the market is susceptible to geopolitical issues.”
“Our balance sheet shows the market to be in deficit by around 1m b/d in the second quarter of the year before returning to a small surplus in the second half of 2024,” ING commodity analysts said in a Thursday note.
“However, this surplus could disappear quickly if OPEC+ members decide to roll over their additional voluntary cuts of 2.2m b/d.”
The development comes ahead of the anticipated fuel price review on Tuesday, May 14, by EPRA.
And with the mixed movements of the exchange rate and the global oil prices, little movement is expected in fuel prices to be announced next week.
As of May 9, the dollar exchanged at Ksh131.25 in comparison with Ksh133.20 for the week that ended on May 2.
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