Global oil prices rose in European trade on Thursday on track for the second straight profit, with US crude scaling a week high, while Brent hit two-week highs.

It comes amid prospects of reduced supplies in the markets after Washington imposed additional sanctions  to impede Iranian oil shipments, while some OPEC producers vowed productions cuts.

Prices

US crude oil price rose 1.75% today to $63.01 a barrel, with a session-low at $61.94.

Brent rose 1.45% today to $66.89 a barrel, an April 7 high, with a session-low at $65.95.

On Wednesday, US crude rose 0.7%, while Brent rallied 1.75% following strong Chinese data/

Iran Sanctions

US President Trump’s administration issued new sanctions targeting Iranian oil exports, including sanctions on Chinese refineries, raising the pressure on Tehran amid talks on Iran’s nuclear program.

OPEC Output Cuts

OPEC announced on Wednesday that it received updated plans from Iraq, Kazakhstan, and other countries to conduct production cuts in order to compensate for increased production beyond the quotas recently.

US Stocks

The Energy Information Administration reported a buildup of 0.5 million barrels in US crude stocks last week, slightly above estimates of a 0.4 million barrels build.

Total stocks are now up to 443 million barrels, the highest since July 2024 in a negative sign for demand in the US.

US unemployment claims fell to 215 thousand in the week ending April 12 from 224 thousand in the previous reading, below estimates of 225 thousand. 

The European Central Bank cut interest rates at today's meeting by 25 basis points to 2.4%, the lowest since December 2022, matching analysts' expectations. 

The US dollar rose in European trade on Thursday against a basket of major rivals, while trying to recover from three-year lows on active short-covering.

Following recent remarks by Fed Chair Jerome Powell, the odds of a Fed interest rate cut in the first half of the year tumbled, with traders now waiting for more US labor data to gather more clues.

The Price

The dollar index rose 0.5% today to 99.75, with a session-low at 99.22.

On Wednesday, the index lost 0.8%, resuming losses and recovering from three-year lows at 99.01.

Powell

Fed Chair Jerome Powell said that tariffs and the ongoing trade war between the US and the world, especially China, could weaken the Fed’s ability to contain inflation and boost US growth.

Powel expects inflation to rise and growth to slow down, but it’s still not clear which one of them needs more focus amid trade uncertainty. 

Powell said the Fed is assuming a wait and see stance until the dust clears before taking a monetary policy decision.

He also expects the economy  to move away from full employment and contained inflation targets due to the impact of tariffs.

US Rates

According to the Fedwatch tool, the odds of a Fed 0.25% interest rate cut in May stood at 17%.

The odds of such a cut in June stood at a much bigger 65%.