2024-02-01 04:30:29
Global oil prices rose in early trading Thursday, supported by signals from the Federal Reserve regarding a possible start to cut interest rates and as China unveiled new support measures for the struggling real estate market.
By 0140 GMT, Brent crude futures rose 46 cents, or 0.6 percent, to $81.03 per barrel. US West Texas Intermediate crude futures also increased 47 cents, equivalent to 0.6 percent, to $76.33 per barrel, following falling more than two dollars per barrel in the last session.
Federal Reserve Chairman Jerome Powell said on Wednesday that interest rates have peaked and will fall in the coming months as inflation continues to decline and expectations of continued growth for jobs and the economy.
Data showed that US labor costs rose less than expected in the fourth quarter, and the annual increase was the smallest in two years. These data reinforced expectations that the central bank may begin cutting interest rates by June.
Low interest rates and economic growth support demand for oil.
While China, the second largest economy in the world, revealed new measures to support the real estate market. The country ended last year with the worst decline in new home prices in nearly nine years.
Analysts at JP Morgan expect China to remain the largest single contributor to the growth of global oil demand this year, and they estimate that oil demand there will grow by 530,000 barrels per day this year following an increase of 1.2 million barrels per day last year.
“Regardless of geopolitical factors, our view remains that 2024 will be a fundamentally good year for the oil market,” JP Morgan said in a note to clients.
Concerns regarding attacks by the Yemeni Houthi group on shipping in the Red Sea are driving up costs and disrupting global oil trade.
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