Uncertain U.S. Economic Data Affects Oil Prices
Oil prices experienced a slight decline in the Asian market on Friday due to concerns surrounding U.S. economic data set to be released later in the day. Despite optimism about Chinese demand and potential Middle Eastern supply disruptions, the uncertainty over U.S. inflation and employment numbers has dampened bullish sentiment.
Brent and WTI Futures Fall as Market Awaits US Data
Brent futures saw a 0.42% drop, while U.S. West Texas Intermediate (WTI) crude fell by 0.3%. As markets eagerly await U.S. spending and inflation data on Friday, the outcome will significantly impact the U.S. dollar.
Potential Rebound of Oil Market Based on US Data
According to Tina Teng, an analyst at CMC Markets in Auckland, the market may continue to rebound if U.S. Personal Consumption Expenditures (PCE) data shows that inflation is expected to cool further. However, disappointing data could raise concerns about Federal Reserve policy and limit recent gains.
China's Economic Recovery Boosts Oil Prices
China's manufacturing activity, which rose in March albeit slower than in February, exceeded economists' expectations and has increased optimism about the country's economic recovery. This has contributed to the recent uptick in oil prices.
The Ending of COVID-19 Restrictions Impacts on Oil Demand
With the removal of coronavirus-related restrictions, China's industrial activity has become a key determinant of oil prices, particularly amid weaker global demand.
Oil Prices Set for Second Consecutive Week of Gains
Despite recent declines, oil prices are on track to achieve a second straight week of gains, following the largest bank failure since the 2008 financial crisis. Fears of a global banking crisis have subsided after the rescue of two banks in the U.S. and Europe.
Factors Affecting Oil Prices: Stockpiles and Export Halts
Oil prices rose over 1% on Thursday due to lower U.S. crude stockpiles and decreased exports from Iraq's Kurdistan region. However, pressure remains from smaller-than-anticipated cuts to Russian supplies. The U.S. Energy Information Administration reported a decrease in U.S. crude oil stockpiles to a two-year low in the week leading up to March 24th.