Oil Prices Close Lower, Marking Weekly Decline Amid Dimming Hopes for US Rate Cut
“That is not something the market wants to digest right now, especially as it is trying to figure out a direction,” he added.
Despite the influence of elevated interest rates, particularly in the United States, some analysts contend that oil demand has largely remained robust.
According to analysts at JPMorgan, demand indicators reveal a notable increase in oil demand, with a rise of 1.7 million barrels per day (bpd) observed month over month through February 21st, underscoring the resilience of demand in the face of prevailing economic conditions.
“This compares to a 1.6 million bpd increase observed during the prior week, likely benefiting from increased travel demand in China and Europe,” the analysts said.
Meanwhile, Gaza truce talks were underway in Paris in what appears to be the most serious push in weeks to halt the conflict in Palestine and see Israeli and foreign hostages released.
Ceasefire talks could prompt the market to anticipate an easing of geopolitical tensions, Tim Evans, an independent oil market analyst, said in a note.
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Still, tensions in the Red Sea continued, with attacks by Iran-backed Houthi militants near Yemen on Thursday forcing more shipping vessels to divert from the trade route.
U.S. energy firms this week added the most oil rigs since November, and the most in a month since October 2022, energy services firm Baker Hughes (BKR.O), opens new tab said.
The oil rig count, an early indicator of future output, rose by six to 503 this week, and increased by four this month.
