Oil Prices Register Gains as Demand Rises
During the operations of this Friday, the price of oil registers gains. Also, after prices fell last week, crude oil is headed for a weekly rise. Oil prices are trading higher as higher demand from China and supply cuts from the Organization of Petroleum Exporting Countries and allies (OPEC+) raised prices. The price rose despite the expected weakness in the world economy and the expectation of further interest rate hikes later in the year.
Increased Demand in China
Increased demand for the fuel in China According to Reuters, the performance of China’s refineries increased in May to its second-highest total on record, and the CEO of Kuwait Petroleum Corp expects Chinese demand to continue to rise during the second half. However, supply will be held back by voluntary crude production cuts implemented in May by the OPEC+, in addition to an additional cut of 1 million barrels per day (bpd) announced by Saudi Arabia for the month of July.
Current Oil Prices
As of the 1:17 pm ET update, West Texas Intermediate (WTI) was up $0.64 or 0.91%, trading at $71.26. Elsewhere, Brent futures rose $0.51 or 0.67% to trade at $76.18 a barrel, according to Bloomberg Energy data. Brent is heading for a 1.6% weekly gain and West Texas Intermediate is on track for a rise of 1.2%, according to Reuters.
Expectations Before Federal Reserve Decisions
This week, the Federal Reserve of the United States announced a pause in its cycle of interest rate increases. Nonetheless, the Fed signaled the likelihood of two more rate hikes this year, as the target of slowing inflation to 2% has not been reached. According to the Consumer Price Index report, the year-on-year rate was 4% in May. Possible future increases by the Fed have raised fears that the US economy, the world’s largest oil consumer, will slip into recession in the second half of the year.