Oil Prices Experience Nearly 2% Increase Amid Fluctuating Trends
Oil prices experienced a nearly 2% increase during the Asian session on Friday (February 16). U.S. crude oil was seen fluctuating within a narrow range and trading at approximately $78.17 per barrel. This surge in oil prices came after U.S. retail sales data caused a sell-off in the dollar. The fluctuating trends in the oil market were influenced by various factors, including the latest retail sales data and reports indicating a slowdown in demand growth for oil.
Thursday saw a significant rise in oil prices, with Brent crude oil futures closing up 1.5% at $82.86 per barrel. Similarly, U.S. crude oil futures also rose by 1.8% to settle at $78.03 per barrel. The weakening of the dollar following U.S. retail sales data contributed to the increase in oil prices. Typically, a weaker dollar leads to higher oil prices, as it makes oil cheaper for investors using other currencies.
The U.S. Department of Commerce’s Bureau of Statistics reported a 0.8% month-on-month decline in retail sales for January, marking the largest drop since March 2023. Additionally, the data sparked optimism among investors that the Federal Reserve might consider an early interest rate cut, which could positively impact oil demand.
However, the International Energy Agency (IEA) also released a report on Thursday, indicating a slowdown in global oil demand growth. The IEA forecasted that demand growth would slow to 1.22 million barrels per day by 2024, which is approximately half of last year’s increase. This prediction constrained further increases in oil prices. Additionally, the IEA expanded its forecast for production growth in 2024, expecting global crude oil production to reach a record 103.8 million barrels per day, driven by rising production from non-OPEC entities, especially the United States.
The fluctuating oil market was also influenced by other factors such as U.S. refinery refining volumes falling to their lowest level since December 2022, and an increase in crude oil inventories, according to the U.S. Energy Information Administration.
Furthermore, news of the United Kingdom and Japan slipping into recession also weighed on oil prices. With both major economies facing economic challenges, concerns about global oil demand and market stability were heightened.
The oil market is expected to focus on various financial data and events, including speeches by Federal Reserve officials, retail sales data from the UK, and inflation rate expectations for February 16. At 08:00 Beijing time, U.S. crude oil was currently trading at $78.15 per barrel, highlighting the ongoing fluctuating trends in the oil market.