Oil Prices Rise as US Refinery Demand Improves
Positive Trend Continues for Oil Prices
Oil prices increased for the second consecutive day, driven by optimistic expectations of improved demand in the U.S., the world’s leading oil consumer. Refineries are working to restore operations after outages, coupled with a weakening dollar, contributed to the positive momentum.
Price Movements and Market Sentiments
At 0740 GMT, Brent crude futures rose by 0.4% to $83.37 a barrel, while U.S. West Texas Intermediate crude futures climbed by 0.5% to $78.28 a barrel. Market strategist Yeap Jun Rong from IG noted that geopolitical tensions also played a role in supporting oil prices. However, higher-than-expected inventories build prompted caution among market participants.
Impact of Refinery Outages
Crude stocks in the U.S. rose significantly due to outages at major refineries, resulting in the lowest utilization rates in two years. However, refineries are gradually resuming operations, with BP’s Indiana refinery and TotalEnergies’ Port Arthur refinery working towards full production after recent disruptions.
Expectations and Inventory Data
Analysts anticipate a rise in U.S. refinery run rates, with investor focus on the official inventory data from the U.S. Energy Information Administration (EIA) due at 1600 GMT on Thursday. The weaker U.S. dollar has also contributed to the appeal of oil as a commodity, making it less expensive for traders holding other currencies.
Positive Market Outlook
The decline in the U.S. dollar over four consecutive sessions has added to the short-term appeal for oil, according to market strategist Yeap. The overall market sentiment remains positive amidst the ongoing developments in the oil industry.
