Brent futures gained 61 cents, or 0.8%, to settle at $77.41 a barrel, while U.S. West Texas Intermediate crude added 65 cents, or 0.9%, to settle at $72.02
Oil prices gained nearly 1% on Thursday on the prospect of escalating conflict in the Middle East.
Brent futures gained 61 cents, or 0.8%, to settle at $77.41 a barrel, while U.S. West Texas Intermediate (WTI) crude added 65 cents, or 0.9%, to settle at $72.02.
Earlier in the session, both benchmarks were up over $2 a barrel but have retreated on an unexpected rise in U.S. inflation and reports China was seeking fewer Saudi imports.
U.S. diesel and gasoline futures led energy markets higher with diesel, which is also used as a heating fuel, gaining nearly 3% to a three-week high on forecasts for extreme cold across much of the U.S. next week.
The best kind of rally in the crude oil space is one that is driven by the products. As long as the refiner needs to make more product, he is going to need to buy more crude oil, said Bob Yawger, director of energy futures at Mizuho Bank.
Global trade dropped by 1.3% from November to December 2023 as attacks on merchant vessels in the Red Sea led to a slump in the volumes of cargo transported in the region.
Slowing demand, unrest in Middle East and muted price reaction have producers, consumers and market participants alike feeling paranoid about oil prices, Barclays said as it lowered its 2024 Brent forecast by $8 to $85 a barrel.
Oil prices were higher even though U.S. data showed consumer inflation increased 3.4% in December on a yearly basis.
The higher-than-expected increase in inflation could delay a much expected interest rate cut in March from the U.S. Fed.
Given that markets have continued to price in rate cuts in March, a delay of the currently expected timeline would dampen investor sentiment, likely bringing crude price drops with it, analysts at Gelber and Associates said.
