Oil Prices Slip Amid Delayed Rate Cut Expectations and Positive Chinese Trade Data
Oil Prices Slip Amid Delayed Rate Cut Expectations
Oil prices slipped on Thursday as expectations that U.S. interest rate cuts could be delayed capped gains. However, upbeat Chinese trade data augured well for demand in the world’s top oil importer.
Market Movement
Oil futures were down 58 cents or 0.7% to $82.38 a barrel by 1417 GMT, while U.S. West Texas Intermediate crude futures inched down 67 cents or 0.8% to $78.46 a barrel. Despite reaching near a 2024 high, oil prices retreated after U.S. data showed oil stocks rose less than expected and fuel inventories fell, reflecting robust demand.
Delayed Rate Cut Possibility
Markets are anticipating a potential delay in the U.S. Federal Reserve’s first interest rate cut to the second half of this year. This delay could boost the U.S. dollar, impacting dollar-denominated oil demand among buyers using other currencies.
Chinese Trade Data
China’s import and export growth exceeded estimates, indicating a positive turn in global trade. China posted a 5.1% rise in imports in the first two months of 2024, reaching about 10.74 million barrels per day. This surge in crude purchases was driven by increased fuel sales during the Lunar New Year holiday.
Market Sentiment
The positive trade balance data from China signals optimism for the oil market’s demand outlook. However, a risk-off sentiment prevails in financial markets as stocks retreat on Wall Street.
Inventory Insights
Crude inventories rose for a sixth consecutive week, growing by 1.4 million barrels, below the forecasted 2.1 million-barrel rise. Gasoline and distillate stocks saw larger declines than expected, as per EIA data.
