Oil prices rose amid quiet trading due to public holidays in Britain and the United States after a pessimistic week marked by the outlook for US interest rates in the face of steady inflation.
The July delivery price for Brent crude rose 76 cents to $82.88 a barrel. August’s most active contract rose 80 cents to $82.64. U.S. West Texas Intermediate crude futures rose 78 cents to $78.50.
Brent lost about 2 percent last week and West Texas Intermediate crude about 3 percent after the minutes of the Federal Reserve’s meeting showed some officials would be willing to raise interest rates further if deemed necessary to control stubbornly high inflation.
Vandana Hari, founder of oil market analyst Vanda Insights, said: “Sentiment in the oil complex… It has been volatile as investors constantly recalibrate their expectations for the Fed’s monetary policy trajectory.”
Recent data from Western economies have changed expectations of interest rate cuts depending on geography.
Bank of America analysts said on Friday that the European Central Bank is likely to cut interest rates in June as investors prepare for higher US interest rates for longer.
The US Personal Consumption Expenditure (PCE) index expected this week will be in the spotlight for further signals on interest rate policy. The index, due for release on May 31, is seen as the US Federal Reserve’s preferred measure of inflation. German inflation data on Wednesday and Eurozone readings on Friday will also be monitored for signs of the European interest rate cut that trader expected next week.
Oil market slightly higher amid geopolitical volatility and concerns
The WTI crude market rose slightly during Monday’s session. But keep in mind that it’s also Memorial Day in the United States, so there are a lot of liquidity issues. So, I don’t rely too much on the candle in the early hours of North America, but what I look at is the fact that we found support in an area where we needed to find it at around $77.
At this point, I think the market is likely to head towards the $80 level at the top. But still, I think we have a scenario where you have to be careful and realize that a lot of intermittency will be the norm. This time of year is usually very bullish for crude oil, so I’m quite good at buying it, but I realize it won’t necessarily be the easiest market to deal with.
Brent Technical Analysis
Brent markets look very similar. If we can break above the $83 level, I think that will bring the rush as we try to reach $84.50. Short-term pullbacks continue to be buying opportunities, as there will be a lot of demand for crude oil.
Of course, there are as many geopolitical concerns in the Middle East as usual. In this case, I think it makes a lot of sense to buy dips and not worry about selling in the market at all.
Key policymakers at the European Central Bank said on Monday that the bank has room to cut interest rates as inflation slows but should take its time to ease policy, even if the direction of travel is already clear.
The focus will also be on the upcoming meeting of the OPEC+ group of oil producers, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia.
Global oil demand forecast to grow until 2034
Global oil demand is expected to grow for at least another decade, according to Goldman Sachs analysts, who argue that slowing electric vehicle sales momentum will keep demand for petroleum products strong until 2034.
Analysts at Wall Street Bank raised their forecast for oil demand in 2030 to 108.5 million bpd from 106 million bpd in a previous forecast.
Goldman now expects global oil demand to peak in 2034, at around 110 million barrels per day. This will be followed by years of oil demand until around 2040, according to bank analysts led by Nikhil Bhandari.
“We expect oil demand to peak by 2034 at 110 million barrels per day; analysts at Goldman then wrote, we expect a moderate decline in the compound annual growth rate (CAGR) of demand by 0.3% through 2040.
Most of the global oil demand growth will come from emerging markets in Asia, led by China and India, reflecting the views of all other forecasters who expect these two economies to be the world’s largest contributors to global oil demand growth. The next decade.
Separately, Goldman Sachs recently said in a report that “sales momentum for electric vehicles (EVs) is slowing globally, and hybrid vehicles (HEVs) and rechargeable hybrids (PHEVs) are proving to be more competitive than initially thought.”
The slowdown in battery electric vehicle sales is a result of growing concerns about electric vehicle capital costs, government policy uncertainty with the U.S. and other elections this year, and concerns about a shortage of fast charging stations, according to Goldman
