Investing.com – Oil prices edged higher on Thursday as signs that global interest rate cuts are on the way boosted optimism about the global economy, easing some concerns about demand following an unexpected rise in U.S. inventories a day earlier.
At 2:30 PM ET (18:30 GMT), the price rose 1.9% to $75.50 per barrel and 0.1% to $78.44 per barrel.
Global optimism about interest rate cuts is rising after weak US jobs data and the ECB’s interest rate cut
The ECB became the second major central bank to begin interest rate cuts on Thursday, after the Bank of Canada earlier, raising hopes that others, including the Federal Reserve, could soon follow suit.
Weak U.S. labor data on Thursday fueled bets that the Federal Reserve would kick in.
The number of Americans who filed rose by 229,000 last week, more than the expected 220,000.
Heavy weekly losses on OPEC+ and US stocks
Crude oil benchmarks are still on track to post weekly losses after the Organization of the Petroleum Exporting Countries and Allies (OPEC+) signaled it could start easing production cuts this year.
In addition, government inventory data showed on Wednesday that the US grew by 1.2 million barrels in the week to May 31, compared with expectations for a decline of 2.1 million barrels.
grew by a larger than expected 3.2 mb, while growing slightly less than expected at 2.1 mb.
The overall build-up of inventories raised some concerns about cooling demand among the world’s largest fuel consumer, even as the summer travel season began.
OPEC+ could backtrack by phasing out supply constraints – Roth
Continued weakness in oil prices could cause OPEC+ to backtrack on its plans to start phasing out production cuts this year, Roth MKM analysts said in a note.
The cartel said at its latest meeting that it plans to scale back production cuts by 2.2 million barrels per day from October 2024 to September 2025, triggering a sharp drop in oil prices.
But weak oil prices may see OPEC+ postpone or even postpone plans to increase production.
(Ambar Warrick contributed to this article.)
