Brent nears $86, further supported by jobs data

Brent crude and U.S. benchmark West Texas Intermediate found their feet again on Thursday amid rising tensions between Israel and Lebanon, on the brink of all-out war, and further supported by jobs data showing fewer job demands unemployment for the first time last week, although all indications are that the US labor market is still cold.

Brent hit a seven-week high on Thursday, trading up 0.62% at $85.60 at 2:15 pm ET, as this week’s jobs data provided more optimism about a rate cut sometime this year.

WTI, the US benchmark, was trading up 0.71% at $81.15, for a gain of 58 cents on the day.

Last week, the Fed left interest rates unchanged, indicating there would be a cut in 2024, with more cuts to follow next year and beyond. Even before the Fed’s announcement, new inflation data showed a notable slowdown in consumer price gains for May, the clearest indication yet that inflation is cooling.

On Thursday, the Bank of England (BoE) announced it would keep its key interest rate unchanged at a 16-year high of 5.25%. The BoE meeting was the last before the UK election on July 4.

“We need to be sure that inflation will remain low and that is why we have decided to keep rates at 5.25% for now,” BoE Governor Andrew Bailey was quoted as saying by Reuters, calling it “good news”.

Earlier this week, amid heated debate over global oil demand, Rystad Energy projected that global oil supply growth will slow in 2024 and potentially next year due to the expansion of OPEC+ voluntary cuts and the cartel’s demand forecasts . Based on the latest OPEC+ guidance, total global oil supply growth will be close to zero in 2024, which could make this year the first since 2020 with zero supply growth, Rystad said.

By Charles Kennedy for Oilprice.com

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