Oil prices settle lower, but notch second-monthly gain on tighter supply hopes

March 01, 2024 06:38 AM AEDT | By Investing

Oil prices settle lower, but notch second-monthly gain on tighter supply hopes

In-line inflation data cools fears

The personal consumption expenditures price index data released earlier Thursday rose 0.3% on the month and 2.8% on annualized basis in January, matching economists and providing relief for markets following signs of faster inflation last month.

The core PCE price index, the Federal Reserve's favorite inflation gauge, rose 0.4% on the month in January, an annual rise of 2.8%.

Fears of higher rates have been a key weight on oil, given that economic conditions and demand usually deteriorate in high rate environments.

OPEC+ extension hopes, retreating U.S. output stoke tighter market hopes

Expectations for OPEC and its allies or OPEC+, to extend their cuts into the second-quarter also helped boost sentiment and hope for tighter markets this year. OPEC+ is now widely expected to maintain its current production curbs until end-2024.

OPEC+ is set to meet in early March to decide whether to extend oil production curbs. In November, the group collectively decided to voluntarily cut 2.2 million barrel per day production in Q1.

The rising expectations for output cuts come as U.S. output fell slightly from record highs. U.S. crude oil production fell to 13.315 million barrels per day in December, down from November’s record of 13.314 million barrels per day, data from the Energy Information Administration showed on Thursday.

Still, fears of a Chinese demand slowdown grew after a major state-owned producer warned that oil demand in the world’s largest crude importer was expected to remain stagnant this year.

The Middle East conflict, meanwhile, showed no signs of abating, with both Israel and Hamas playing down prospects for a truce in their war in Gaza.

(Peter Nurse, Ambar Warrick contributed to this article.)

This article first appeared in Investing.com

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (“Kalkine Media, we or us”), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content.
Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have made reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.