Oil settles down

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NEW YORK- Oil futures prices settled slightly lower on Friday as investors weighed weaker US consumer sentiment against mounting hopes for a Federal Reserve rate cut in September.

Brent crude futures settled 37 cents lower to $85.03 a barrel. US West Texas Intermediate crude futures fell 41 cents, or 0.5 percent , to close at $82.21 a barrel.

For the week, Brent futures fell more than 1.7 percent after four weeks of gains. WTI futures posted 1.1 percent weekly decline.

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A monthly survey by the University of Michigan showed US consumer sentiment fell to an eight-month low in July, although inflation expectations improved for the next year and beyond.

The US Labor Department said the producer price index (PPI) rose 0.2 percent in June, slightly more than expected, as the cost of services climbed. Still, investors expect the Fed could start cutting rates in September.

“The market isn’t afraid of the Fed at this point,” said Phil Flynn, an analyst at Price Futures Group.

Lower rates are expected to boost economic growth, which could boost fuel consumption.

“Cooling US inflation numbers may support the case for the Fed to kick-start its policy easing process earlier rather than later,” said Yeap Jun Rong, market strategist at IG.

“It also adds to the series of downside surprises in US economic data, which points to a clear weakening of the US economy,” he added.

Oil prices have drawn some support from US gasoline demand, which government data showed on Wednesday was at 9.4 million barrels per day (bpd) in the week ended July 5, the highest since 2019 for the week that includes the Independence Day holiday. Jet fuel demand on a four-week average basis was at its strongest since January 2020.

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