The oil prices remained slightly above $80 per barrel on Wednesday. Investors’ hope that the US Federal Reserve will soon stop rising interest rates and China’s pledge to revive economic growth were the driving forces behind this.
At 13:25 GMT, the price of a barrel of West Texas Intermediate (WTI) crude had risen by 51 cents to $76.26, while the price of a barrel of Brent crude had risen by 63 cents to $80.26.
The world’s second-largest economy’s chief economic planner pledged on Tuesday to implement measures that will restore and boost consumption. This might result in a rise in the demand for oil.
According to a report that was made public on Tuesday in the US, retail sales increased less in June than was anticipated. The possibility that the Federal Reserve will stop raising interest rates increased as a result of this news.
A rise in interest rates will increase the cost of borrowing money, which will impede economic growth and reduce demand for oil.
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Oil Price Demand on the Rise as Inflation Improves
Klaas Knot, a member of the European Central Bank’s (ECB) governing council, stated on Tuesday that rate increases after the meeting slated for the following week were far from likely.
This was yet another encouraging sign. The most recent data from Canada and the UK suggested that inflation may be starting to reduce in the interim.
Naeem Aslam, a trader with Zaye Capital Markets, claims that since inflation has started to level down, traders have started to become much more bullish. Any improvement in the inflation numbers also translates into an increase in the demand for oil.
The American Petroleum Institute (API) reported that stockpiles of crude oil, gasoline, and distillate all fell over the course of the previous week.
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Source: www.reuters.com