By Adedapo Adesanya
Oil prices edged higher Thursday spurred by data from China and the US signalling demand in the world’s two biggest crude-consuming nations could climb.
Brent futures rose by 30 cents or 0.4 per cent to settle at $83.88 a barrel, and the US West Texas Intermediate (WTI) crude appreciated by 27 cents or 0.3 per cent to close at $79.26 per barrel.
Crude oil imports jumped over the previous year in April and exports and imports returned to growth last month, indicating an increase in demand at home and overseas as the world’s largest oil importer moves to shore up a shaky economy.
Crude imports in April totalled 44.72 million metric tons, or about 10.88 million barrels per day, according to data from the General Administration of Customs, representing a 5.5 per cent increase from the relatively low 10.4 million barrels per day imported in April 2023.
Market analysts noted that the improved China trade balance data added to the upside momentum after it failed to meet expectations.
In the US, the number of new claims for unemployment benefits rose last week to the highest in more than eight months, further evidence that the labour market was cooling.
This could be factored in cutting interest rates as analysts projected that cooling US labour market momentum puts two interest rate cuts from the US Federal Reserve this year back on the table. Lower rates would reduce borrowing costs and could spur economic growth and oil demand.
Meanwhile, the Bank of England took another step toward lowering interest rates, keeping rates at a 16-year high of 5.25 per cent. It said it would start tapering rates from next month.
After cutting rates in March 2020 as the coronavirus pandemic swept the world, the BoE began raising borrowing costs in December 2021 – earlier than other leading central banks – to counter high inflation which peaked at 11.1 per cent in October 2022.
On the geopolitical front, Israel reportedly bombarded areas of Rafah after President Joe Biden said the US would withhold weapons from Israel if its forces mount a major invasion of the southern Gaza city.
In response to Israel’s latest operation, the leader of the Houthis in Yemen said the Iran-backed group, which has already disrupted shipping in the Red Sea, would target ships of any company related to supplying or transporting goods to Israel.
Modupe Gbadeyanka