HOUSTON: Oil prices rose over 1 per cent in muted trade owing to public holidays in Britain and the United States after a downbeat week characterised by the outlook for US interest rates in the face of sticky inflation.

The Brent crude July contract settled $1, or 1.2pc higher at $83.12 a barrel. The more active August contract rose $1.04 to $82.88.

US West Texas Intermediate (WTI) crude futures were up 93 cents at $78.65.

Brent lost about 2pc last week and WTI nearly 3pc after Federal Reserve minutes showed some officials would be willing to raise interest rates further if it were deemed necessary to control stubbornly high inflation.

“Sentiment in the oil complex … has been skittish as investors are constantly recalibrating expectations for the Federal Reserve’s monetary policy trajectory,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.

Recent data emanating from Western economies has shifted rate-cut expectations depending on geography.

On Monday, key European Central Bank (ECB) policymakers said the bank has room to cut interest rates as inflation slows but must take its time in easing policy.

Figures for inflation in the eurozone are due on Friday and economists believe an expected tick up to 2.5pc should not stop the ECB from easing policy next week.

The US personal consumption expenditures index expected this week will be in the spotlight for further signals about interest rate policy. The index, due to be released on May 31, is viewed as the US Federal Reserve’s preferred measure of inflation.

German inflation data on Wednesday and eurozone readings on Friday will also be watched for signs of a European rate cut that traders have pencilled in for next week.

Eyes will also be trained on the coming meeting of the OPEC+ group of oil producers comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia. The meeting is to take place online on June 2.

An extension to output cuts of 2.2 million barrels per day is the likely outcome, Opec+ sources have said this month.

Goldman Sachs raised its global oil demand forecast for 2030 on Monday and expects consumption to peak by 2034 on a potential slowdown in electric vehicle adoption, keeping refineries running at higher-than-average rates till the end of this decade.

Published in Dawn, May 28th, 2024

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Royal tantrum
20 Jul, 2024

Royal tantrum

DESPITE the government’s protestations, a constitutional crisis seems to have been averted — at least for now....
Bangladesh chaos
20 Jul, 2024

Bangladesh chaos

CHAOS has engulfed Dhaka, as well as other parts of Bangladesh, over the past few days. Anti-government protests had...
Fitch’s estimate
20 Jul, 2024

Fitch’s estimate

FITCH seems to be more optimistic about Pakistan accelerating its economic growth rate to 3.2pc during this fiscal...
Misplaced priorities
Updated 19 Jul, 2024

Misplaced priorities

The government must call its APC at the earliest and invite all stakeholders to take part; this matter cannot be delayed further.
Oman terror attack
19 Jul, 2024

Oman terror attack

THE normally peaceful sultanate of Oman was shaken by sectarian terrorism on Monday when militants belonging to the...
Urban flooding
19 Jul, 2024

Urban flooding

THE provincial authorities have been taking precautionary measures, or so we have been told, to cope with emergency...