Oil Prices Rise Above $85 on U.S. Rate Cut Hopes and Supply Tightness

ENERGY

DAILY PIPZ Analyst Team

7/12/20241 min read

Oil prices continued their ascent on Thursday, with Brent crude settling above $85 a barrel, marking a second consecutive day of gains. Brent crude futures closed at $85.40, up 0.4%, while U.S. West Texas Intermediate crude rose 0.6% to $82.62 a barrel.

The uptick was fueled by optimism around potential U.S. interest rate cuts following unexpected inflation decelerations in June. Traders adjusted their expectations, pricing in an 89% probability of a Federal Reserve rate reduction in September, up from 73% previously.

Analysts at Growmark Energy highlighted that lower inflation and potential rate cuts could stimulate economic activity. Federal Reserve Chair Jerome Powell acknowledged improvements in price pressures but stressed the need for more data to support rate cut decisions.

The weaker U.S. dollar, influenced by the inflation data, bolstered oil prices, according to Gary Cunningham from Tradition Energy. Meanwhile, Wednesday's U.S. inventory report showing a draw in crude stocks and strong gasoline and jet fuel demand also contributed to the price rally.

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Oil Prices Rise Above $85 on U.S. Rate Cut Hopes and Supply Tightness

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CFDs and Spot FX are complex instruments and come with high risk of losing money rapidly due to leverage and may not be suitable for all kind of traders or investors.

Most of traders or investors accounts lose money when trading CFDs and Forex. You should consider whether you understand how CFDs and Forex work and can afford the high risk of losing your money.

All information that we share in this DAILY PIPZ website are based on our professional analysis in the past and the final decision to trade is yours. Please remember that past performance may not be indicative of future results.

Trade or invest with the money that you can afford to lose. We’re not responsible for any possible outcome that might occurred.