On Friday, crude oil prices declined due to economic concerns and the trajectory of demand for oil, following the release of data from the world’s largest consumers, the US and China.
International benchmark Brent crude traded at $74.63 per barrel at 10.09 a.m. local time (1009 GMT), a 0.46% decrease from the closing price of $74.98 a barrel in the previous trading session.
The American benchmark West Texas Intermediate (WTI) registered at the same time at $70.66 per barrel, down 0.29% from the previous session’s close of $70.87 per barrel.
Both benchmarks lost earlier gains after consumer inflation in China, the world’s second-largest economy, rose at its slowest rate in more than two years in April, adding to global economic uncertainty and concerns over the strength of the country’s economic recovery.
According to National Bureau of Statistics (NBS) data released on Thursday, the consumer price index (CPI) fell short of forecasts, increasing by 0.1% year over year in April. This is a decline from the 0.7% rise recorded in March and the lowest since February 2021.
However, WTI clawed back some of its losses after US Energy Secretary Jennifer Granholm said the government intends to purchase oil to refill its Strategic Petroleum Reserve after the congressionally mandated drawdown ends in June.
Still, the country’s Energy Information Administration (EIA) reported late Wednesday that inventories increased by around 3 million barrels to 462.6 million barrels, raising further concerns about demand driven by the Fed’s tight monetary policies.
Meanwhile, Minneapolis Federal Reserve President Neel Kashkari, during an event on Thursday at the Northern Michigan University in Marquette, Michigan, expressed optimism about inflation rates but warned, “It’s been pretty darn persistent—that means we are going to have to keep at it for an extended period of time.”