ISLAMABAD
Crude oil prices edged lower on Friday as the likelihood of relatively high global supply this year weighed on the US interest rate cuts reports.
As of 1350 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $0.21 (+0.25 percent) to reach $82.75 a barrel. Similarly, the West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $0.25 (-0.33 percent) to $78.67 a barrel.
On the other hand, the price of Arab Light increased by $0.77 (+0.92 percent) to reach $84.27 a barrel. Similarly, the price of Russian Sokol increased by $0.65 (+0.86 percent) to $76.58. Following suit, the price for Opec Basket increased to $82.68 a barrel with an uptick of $0.37 (+0.45 percent).
Oil prices dipped as investors weighed hints of looming interest rate cuts in the United States and Europe against the likelihood of relatively high global supply this year. Oil markets also honed in on signals on the timing of possible rate cuts in the United States and European Union. Lower interest rates could increase oil demand by boosting economic growth.
The European Central Bank (ECB) will likely start lowering interest rates some time between April and June, French central bank head and ECB policymaker Francois Villeroy de Galhau said on Friday. Similarly in the United States, Federal Reserve Chair Jerome Powell said on Thursday that the central bank was “not far” from gaining enough confidence that inflation is falling sufficiently to begin cutting interest rates.
On the other hand, China’s import and export growth beat estimates, suggesting global trade is turning a corner in a positive signal for policymakers as they try to shore up economic recovery.
China posted a 5.1% rise in imports in the first two months of 2024 from a year earlier to about 10.74 million barrels per day (bpd), customs data showed on Thursday, as crude purchases ramped up to meet fuel sales during the Lunar New Year holiday.
Earlier, several members of the Opec+ group oil producers, including Saudi Arabia, the UAE and Kuwait, will extend oil output cuts as part of efforts to support market balance and stability.
In total, Opec+ members are extending additional voluntary cuts of 2.2 million barrels per day to the end of second quarter, the Opec secretariat said in a statement. Saudi Arabia will extend its voluntary cut of one million bpd through to the end of the second quarter of 2024. The UAE will extend its additional voluntary cut of 163,000 bpd for the second quarter of 2024.
