Oil prices add over 1.5% following strong manufacturing data

Economies.com
2024-05-23 14:51PM UTC

Global oil prices rose over 1.5% in American trade on Thursday, on track for the first profit in four days following strong European, UK, and US manufacturing data. 

 

Such data underpinned hopes of increasing global demand on fuel, and overshadowed negative US crude inventory data. 

 

Prices

 

US crude rose 1.8% to $78.63 a barrel, with a session-low at $76.86. 

 

Brent rallied 1.6% today to $82.93 a barrel, with a session-low at $81.23. 

 

US crude lost 1.2% on Wednesday, while Brent shed 1.1%, the third decline in a row amid concerns about weak US demand.

 

Strong Industrial Data

 

Recent data showed the European manufacturing sector rebounded in May, with the British industrial sector rushing into growth territory this month, alongside similar growth in the US manufacturing sector. 

 

Such data is a clear sign of improving global GDP growth in the second quarter of the year, in turn boosting fuel demand.

 

US Stocks 

 

The Energy Information Administration reported a buildup of 1.8 million barrels in US crude stocks last week to 458.8 million barrels, while analysts expected a drop of 2.4 million barrels.

 

US gasoline stocks fell by 0.9 million barrels to 226.8 million barrels, while distillate stocks rose by 0.4 million barrels to 116.7 million barrels. 

 

US Output 

 

The EIA reported no change in US crude stocks at 13.1 million barrels last week for the tenth week in a row. 

 

Prices Outlook

 

Commodities’ analysts at UBS said in a memo that oil prices have strived to advance this month as investors remain cautious in regards to ongoing restrictive monetary policies.

 

The analysts also pointed to persistent concerns about the increasing global crude inventories after a mild winter in parts of the northern hemisphere. 

 

The bank’s analysts expect the oil market to undergo a deficit, with Brent likely rising to $91 a barrel in the next few months.

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