Investing.com — Oil prices settled higher Thursday, as rising hopes for U.S. rate cuts following data showing a cooling job market and weaker inflation boosted bets on firmer crude demand.
At 14:30 ET (19:30 GMT), rose 0.8% to settle at $79.23 a barrel, and rose 0.6% to $83.27 a barrel.
Cooling job market, slowing inflation restore rate cut hopes
Incoming economic data over the past few days including a jobless claims that surprised to the upside and slowing consumer price pressure have restore hopes for September rate cut, and helped boost hopes for firmer crude demand.
The boost to demand hopes come just a day after a slew of weekly petroleum data showed that domestic demand is improving.
“More importantly, gasoline and jet fuel demand increased on a four-week seasonal average,” ANZ Research said in a note, citing EIA data released Wednesday.
Sentiment on oil prices have also supported by a ongoing Middle East tensions as Israel launched its invasion of Rafa amid fading hopes of a Gaza ceasefire.
“Israel appears to have commenced an invasion of Rafah, while Hezbollah fired missiles and rockets at the Jewish state,” ANZ Research said.
OPEC+ meeting looms large
The Organisation of Petroleum Exporting Countries and allies, a group known as OPEC+, meets on June 1, and are set to evaluate their currency output cuts in place.
These producers are currently making voluntary output cuts totalling about 2.2 million barrels per day for the first half of 2024, led by Saudi Arabia rolling over an earlier voluntary cut.
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These curbs come on top of earlier reductions announced in various steps since late 2022 and bring the total pledged cuts to about 5.86 million bpd, equal to just under 6% of daily world demand.
UBS expects them to agree to extend their voluntary production cuts, in an attempt to keep the oil market in balance.
“Oil inventories falling by less than we had expected in recent weeks and U.S. interest rates staying higher for longer are likely to have an impact on OPEC+’s policy of being proactive, preemptive, and precautionary,” said analysts at UBS, in a note dated May 14.
“We now expect the eight member states with voluntary production cuts to extend them by at least three months ahead of the ordinary meeting at the beginning of June.”
(Peter Nurse, Ambar Warrick contributed to this article.)