Brent crude futures jumped 58 cents to $81.13 a barrel and U.S. West Texas Intermediate crude futures added 59 cents to $76.44
Oil prices rose on Thursday, supported by signals from the U.S. Federal Reserve on a possible start to rate cuts and on new support measures for China’s struggling property market.
Brent crude futures jumped 58 cents to $81.13 a barrel and U.S. West Texas Intermediate (WTI) crude futures added 59 cents to $76.44 at 0919 GMT, after dropping more than $2 a barrel in the earlier session.
Those moves are likely supported by expectations for rate cuts this year after a speech by Fed Chair Jerome Powell on Wednesday, CMC Markets analyst Tina Teng said.
Powell said that interest rates had peaked and would move lower in coming months, with inflation continuing to drop and an expectation of sustained job and economic growth.
Lower interest rates and economic growth support oil demand.
But, Powell declined to promise that rate cuts would come as soon as the Fed’s March 19-20 meeting, as investors had hoped.
China, the world’s second largest economy, unveiled new support measures to help stem the fallout from the liquidation of developer Evergrande and as it ended last year with the worst drops in new home prices in nearly nine years.
Analysts at JPMorgan said they expected China to remain the single biggest contributor to global oil demand growth in 2024, forecasting Chinese demand would grow by 530,000 bpd, following a 1.2 million bpd jump last year.
Geopolitics aside, our view remains that 2024 will be fundamentally a healthy year for the oil market and we recommended using December’s sell-off as a buying opportunity, JPMorgan said in a client note.
In the Middle East, concerns about attacks on shipping in the Red Sea are now driving up costs and disrupting global oil trading.
The energy market remains on edge as it awaits a U.S. response to the attack on American troops in Jordan, ANZ Research said in a note.