Oil Rises on U.S. Growth Outlook, Stock Levels in Focus
Oil edged higher, with the U.S. growth outlook in focus after the Federal Reserve left interest rates unchanged, while data showed strong fuel consumption.
Brent crude rose above $71 a barrel after a modest gain on Wednesday, while West Texas Intermediate neared $68. Fed Chair Jerome Powell acknowledged the high level of uncertainty from President Donald Trump’s policy changes, including trade, and new projections showed officials lowered their growth forecasts for this year, while raising their estimates for inflation.
Meanwhile, U.S. gasoline inventories fell last week to their lowest since the start of the year, while distillates — a category that includes diesel — also fell, easing concerns about consumption. Crude stocks rose less than indicated in an industry report, while levels fell at the Cushing, Oklahoma, hub.
Crude remains well below its mid-January peak, as a confluence of bearish factors weighed on prices. While an escalating trade war threatens to hit energy demand as tariffs and retaliatory levies are imposed, OPEC and its allies are set to increase output starting in April, contributing to a weaker global balance sheet. “The Fed is preaching patience over panic, which is curbing rising demand concerns and supporting risk assets,” including oil, said Charu Chanana, chief investment strategist at Saxo Markets Pte. Also, “fading hopes for a ceasefire in the Middle East and lack of progress in Russia-Ukraine peace talks are keeping geopolitical risks elevated, adding to supply concerns.”
Brent for May settlement rose 0.3% to $71.01 a barrel at 3:20 p.m. in Singapore. WTI for April delivery, which expires Thursday, rose 0.6% to $67.58 a barrel. The more active May contract rose 0.3% to $67.12.
Source: Bloomberg
