Oil prices rise despite oversupply concerns
Oil prices saw an uptick on Thursday morning. Investors appeared to brush aside fears of oversupply and slowing growth.
Brent crude futures rose 0.5% to $65.15 a barrel. West Texas Intermediate dipped 0.3%, settling at $63.04 a barrel.
Oil markets have been jittery due to conflicting signals from producers. Hargreaves Lansdown analyst Matt Britzman noted oil had been under pressure.
He attributed the slide to a global oversupply. Yet traders are watching other developments too.
Saudi Arabia pushes production amid demand doubts
Saudi Arabia, the top oil exporter, is cutting prices for Asian buyers. This decision indicates weaker regional demand for oil.
The price cut, effective in July, follows OPEC+ plans to boost oil production. The group’s next move could pressure prices again.
OPEC+ aims to add 411,000 barrels per day next month. This decision might increase volatility in the global oil market.
Still, rising geopolitical tensions are also influencing oil price behavior.
Trade tensions cast a shadow on oil markets
Matt Britzman highlighted the drag from trade tensions. US tariffs and policy shifts under Trump add market instability.
Concerns linger that a slowdown in global growth could reduce oil demand. Tariff fears remain at the center of investor worries.
Uncertainty is also tied to weak US economic data. A disappointing ADP jobs report renewed pressure on the Fed.
President Trump again urged Fed Chair Jerome Powell to lower rates. The call came amid signs of a sluggish recovery.
Investors anticipate Fed and ECB rate decisions
The dollar index hovered near 98.85, flatlining after weak service sector data. Expectations of rate cuts are now rising sharply.
Markets are pricing in a 58bps cut by the Fed by December. Futures show nearly 97% confidence in a cut by September.
Meanwhile, the ECB is expected to lower its rate to 2%. Inflation in the Eurozone slipped to 1.9% in May.
More ECB rate cuts are expected. The market sees rates falling to 1.5% by year-end to support the fragile recovery.
Broader market movements and commodity stability
In currency markets, the pound rose 0.1% to $1.3564. Against the euro, it gained 0.1% to €1.1882 by Thursday morning.
Gold prices were steady. Spot gold held at $3,374 per ounce, while futures traded at $3,307.80.
Trade talks between the US and EU showed progress, but China-US friction persists. Trump called deals with Xi Jinping “extremely hard.”
The FTSE 100 remained stable, reflecting investor caution. Broader equity markets await further cues from central bank decisions.