Brent crude and the U.S. benchmark West Texas Intermediate found their footing again on Thursday amid escalating tensions between Israel and Lebanon, on the brink of an all-out war, and further buoyed by jobs data showing lower first-time unemployment claims last week, though all indications are that the U.S. jobs market is still cooling.
Brent hit a seven-week high on Thursday, trading up 0.62% at $85.60 at 2:15 p.m. ET, as this week’s jobs data lent more optimism of a rate cut at some point this year.
WTI, the U.S. benchmark, was trading up 0.71% at $81.15, for a gain of 58 cents on the day.
Last week, the Federal left interest rates unchanged, indicating that there will be one cut in 2024, with more cuts following the next year and beyond. Just prior to the Fed’s announcement, new inflation data showed a notable slowdown in consumer price increases for May, in the clearest indication that inflation is cooling.
On Thursday, the Bank of England (BoE) announced it would keep its key interest rate unchanged at a 16-year-high of 5.25%. The BoE meeting was its last ahead of UK elections on July 4.
“We need to be sure that inflation will stay low and that’s why we’ve decided to hold rates at 5.25% for now,” Reuters cited BoE Governor Andrew Bailey as saying, calling it “good news”.
Earlier this week, amid the heated debate on global oil demand, Rystad Energy projected that global oil supply growth would slow in 2024 and potentially the following year, due to the extension of OPEC+ voluntary cuts and the cartel’s demand forecast. Based on the most recent OPEC+ guidance, total global oil supply growth will be near zero in 2024, which could render this year the first since 2020 with zero supply growth, Rystad said.
By Charles Kennedy for Oilprice.com
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