Oil prices up as world’s top consumers boost demand

OIL prices rose on Friday, driven by growing demand in the United States and China, the world’s biggest oil consumers, and as the US Federal Reserve gave a positive signal on the possibility of rate cuts.

Brent crude futures LCOc1 were up 0,45 percent, or 37 cents, at US$83,32 a barrel. US West Texas Intermediate crude futures CLc1 rose 0,61 percent, or 48 cents, to US$79,44.

Data released by the Energy Information Administration showed that US gasoline inventories fell by 4,5 million barrels last week, and distillate stockpiles were down by 4,1 million barrels.

Both fell more than expected in a sign of a strong demand.

“With the US driving season just on the horizon, the market could get even tighter in coming weeks,” ANZ Research said in a note.

In China, imports of crude oil rose 5,1 percent in the first two months of 2024 from a year earlier, and India’s fuel consumption increased 5,7 percent year-on-year in February amid strong factory activity in the world’s third-biggest oil importer and consumer.

After accounting for the extra day in February this year, crude oil imports in China were up by 3,3 percent in annual terms, Capital Economics said in a note, in line with expectations of a demand increase for the year.

“But that growth will be substantially lower than in 2023 when the end of zerocovid restrictions led to a surge in activity in the transport and travel sectors,” the note said.

Providing additional support to oil prices, Federal Reserve Chair Jerome Powell said last week that the US central bank was “not far” from gaining enough confidence that inflation is falling to begin cutting interest rates.

In Canada, TC Energy’s Keystone oil pipeline resumed service last week after going offline and temporarily restricting a major conduit of Canadian oil to the United States – one of the factors supporting prices in the previous session.