Crude oil prices saw a relative stability today, Thursday, following a noticeable decline of 1.7% in the previous session. This calm, which is considered a cautious calm, comes as markets await developments in trade talks between the United States and China, the world's largest consumers of oil, creating a sense of uncertainty that affects investor sentiment.
Oil Price Performance Today: Brent crude futures settled at $61.12 per barrel, showing little change, while West Texas Intermediate (WTI) futures rose slightly by 0.1% to reach $58.12 per barrel. This follows a 1.7% drop in both crude types during trading on Wednesday.
Factors Affecting Oil Prices:
Oil prices are currently influenced by demand-related factors and supply-related factors. The demand-related factors are represented in the concern over the results of trade negotiations between the largest consumers of oil.
The market is closely watching the anticipated meeting between U.S. Treasury Secretary Steven Mnuchin and top Chinese economic officials in Switzerland on May 10, raising uncertainty about the outcomes of these negotiations amid fears that the ongoing trade war between the world's two largest economies could slow global economic growth and thus lower demand for crude oil.
Recent remarks from U.S. President Donald Trump, where he hinted at his unwillingness to reduce tariffs on Chinese goods, have further bolstered this pessimistic sentiment.
Another factor is the decline in crude oil inventories in the United States last week, which fell less than expected. U.S. inventories decreased by only 2.0 million barrels last week, while forecasts had indicated a decline of 2.5 million barrels. This unexpected drop followed an increase of 2.7 million barrels the week before.
This represents an additional pressure factor on prices, as this rise indicates a potential weakness in fuel demand, raising concerns among analysts, especially with the traditional summer demand period in the U.S. approaching later this month.
Furthermore, the Federal Reserve kept interest rates unchanged as expected and warned of the continued increase in economic uncertainty, indicating the possibility of lower demand for oil.
