Oil prices ticked upward on Monday, supported by cooling U.S. inflation data that revived hopes for further monetary easing in 2024. The prospect of looser policies bolstering global economic growth and energy demand also lifted broader risk assets.
Brent crude futures rose by 26 cents, or 0.4%, to $73.20 a barrel by 0141 GMT, while U.S. West Texas Intermediate (WTI) crude gained 31 cents, or 0.5%, to $69.77 per barrel.
Market Sentiment Boosted by Cooling Inflation and Political Developments
“Risk assets, including U.S. equity futures and crude oil, started the week on a positive note,” said Tony Sycamore, an analyst at IG Markets. He attributed the gains to inflation data showing a slowdown, which helped ease concerns after the Federal Reserve maintained a cautious tone on monetary policy.
Additionally, the resolution of the brief U.S. government shutdown over the weekend provided further support for market sentiment.
Both crude benchmarks experienced losses exceeding 2% last week, weighed down by concerns about global economic growth and a potential slowdown in oil demand following the Federal Reserve’s cautious stance. Reports from Sinopec, Asia’s largest refiner, predicting China’s oil consumption will peak by 2027, added to the downward pressure on prices.
European Supply Concerns Alleviated
Fears over European oil supply eased as the Druzhba pipeline resumed operations after a brief halt last week due to technical issues at a Russian pumping station.
Shipments through the pipeline, which delivers Russian and Kazakh oil to Hungary, Slovakia, the Czech Republic, and Germany, restarted on Saturday, according to Belarus’ BelTa state news agency. Hungarian Foreign Minister Peter Szijjarto confirmed on Sunday that supplies to Hungary had resumed.
Prior to the disruption, the pipeline transported approximately 300,000 barrels of crude per day.
U.S.-EU Energy Tensions Rise
U.S. President Donald Trump intensified pressure on the European Union last Friday, urging the bloc to increase imports of U.S. oil and gas or face potential tariffs on its exports.
The European Commission responded, expressing readiness to strengthen its energy ties with the U.S., emphasizing the importance of an already robust relationship.
Adding to geopolitical tensions, Trump accused Panama of overcharging for use of the Panama Canal and suggested the U.S. might reassert control over the passage. Panamanian President Jose Raul Mulino sharply criticized the remarks, escalating the dispute.
Oil Rig Activity Rises in the U.S.
Domestically, the number of active U.S. oil rigs rose by one to 483 last week, the highest level since September, according to data from Baker Hughes. The increase highlights sustained production momentum despite ongoing uncertainties in global energy markets.
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