Oil Prices Rise for Fifth Consecutive Week Amidst Optimism in Demand and Supply Cuts

Oil Prices Rise for Fifth Consecutive Week Amidst Optimism in Demand and Supply Cuts

Mubasher: Oil prices rose at the settlement of weekly transactions, recording gains for the fifth week in a row, amid optimism among investors that prices will continue to rise thanks to the recovery in demand and supply cuts.

The appetite for risk in financial markets in general increased due to growing expectations that large central banks such as the US Federal Reserve and the European Central Bank are close to ending the monetary tightening cycle, which boosted expectations for global growth and energy demand, according to the Middle East News Agency.

US crude and Brent increased 5 percent this week, supported by the supply cuts announced by the “OPEC +” alliance earlier this month, and the two crude oil are heading to record gains of 13 percent during the month.

Brent crude rose 75 cents to $84.99 a barrel at closing on Friday, while “NYMEX” crude rose 49 cents to $80.58 a barrel.

And expectations of demand growth increased, last Thursday, after US gross domestic product grew in the second quarter at a rate of 2.4 percent, which exceeded expectations and supports the view of Jerome Powell, Chairman of the Federal Reserve, that the economy is capable of achieving the so-called “soft landing.”


Current gold prices fell 0.3 percent during the ending week, which witnessed a new hike in US interest rates, while gold futures for August delivery rose, during yesterday’s trading, by 0.75 percent, or the equivalent of $ 14.7, to reach $ 1960.4 an ounce, with the decline in the dollar index and bond yields. The US Treasury, after the issuance of economic data that reflected a slowdown in inflationary pressures due to the continued efforts of the Federal Reserve.

The data of the Ministry of Commerce showed that the basic personal consumption expenditures price index increased in June, by 4.1 percent on an annual basis, which was less than expectations for an increase of 4.2 percent, and compared with May, when the index rose by 4.6 percent, which is the lowest level. Since September 2021, it has been viewed by the Fed as the preferred indicator for predicting future inflation trends.

Data from the Labor Department also showed that the US Employment Cost Index, a broad measure of wages and benefits, rose by a seasonally adjusted 1 percent in the three months ending in June, below expectations of 1.1 percent and slowing from an increase of 1.2 percent. during the first quarter of this year.

In the same context, University of Michigan data revealed that the consumer confidence index increased by 11.2% on a monthly basis, at 71.6 points in the revised reading for July, compared to 64.4 points in the previous month, which is lower than the initial reading, up to 72.6 points. In general, the survey attributed Increased confidence points to the continued slowdown in inflation along with stability in the labor markets.

Last Wednesday, the Monetary Policy Committee within the US Federal Reserve raised interest rates by 25 basis points (0.25%).

Federal Reserve Chairman Jerome Powell believes that inflation is very high, and he said in late June that he expected more tightening in monetary policy, a term that alludes to more interest-raising decisions.

The latest inflation data in the US revealed more encouraging signs. The consumer price index rose by 3 percent year-on-year in June, up from 9.1 percent a year earlier.

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2023-07-29 08:17:27
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