[NEW YORK] Oil prices edged up on Thursday (Apr 24) as investors weighed a weaker US dollar, potential Opec+ output increase, mixed economic news, conflicting US tariff signals and news from the Russia-Ukraine war.
Brent crude futures rose 43 US cents, or 0.7 per cent, to settle at US$66.55 a barrel. US West Texas Intermediate (WTI) crude rose 52 US cents, or 0.8 per cent, to settle at US$62.79.
In the US, the number of people filing for unemployment benefits rose marginally last week, suggesting a resilient labour market despite economic turbulence caused by tariffs on imported goods.
Businesses are increasing prices and cutting financial guidance due to higher costs stemming from US President Donald Trump’s trade war, which has also roiled global supply chains.
US Federal Reserve officials indicated in television interviews they see no urgency to change monetary policy as they seek more information to determine how trade tariffs are affecting the economy.
“Markets are still trying to make sense of the data, as employment stats show a resilient labour market while the Fed tempers bullishness with commentary that unemployment rates may be affected by tariffs,” analysts at energy consulting firm Gelber and Associates said in a note.
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The US dollar staged a broad retreat on Thursday, as investor gloom over the lack of any real progress towards defusing the US-China trade war reasserted itself.
A weaker US currency makes dollar-priced commodities such as oil less expensive for buyers using other currencies.
Supply uncertainty
Iranian Foreign Minister Abbas Araqchi said on Thursday he was ready to travel to Europe for talks on Tehran’s nuclear programme. France indicated European powers were ready for dialogue if Tehran showed it was seriously engaged.
Successful talks with Europe and the US would likely result in the lifting of sanctions on Iranian oil exports. Iran is the third biggest oil producer in Opec behind Saudi Arabia and Iraq.
Trump criticised Russian President Vladimir Putin on Thursday after Russia pounded Kyiv with missiles and drones overnight, saying “Vladimir, STOP!”
On Wednesday, Trump said Ukraine’s leader was hampering peace talks on ending Russia’s war in Ukraine, which could allow more Russian oil to flow to global markets. Russia is one of the world’s biggest oil producers along with the US and Saudi Arabia.
Still, many European countries are trying to phase out imports of Russian oil due to the war. European Commission President Ursula von der Leyen said the commission will present a roadmap in the next two weeks on keeping an EU pledge to quit Russian fossil fuels by 2027.
Russia is a member of the Opec+ group. Reuters reported on Wednesday that several Opec+ members had suggested the group accelerate oil output increases for a second month in June.
“They would be stuffing barrels into a global economy that is already struggling with US tariffs and a trade war between the two largest global economies – the US vs China,” Bob Yawger, director of energy futures at Mizuho, said in a note.
“Opec+ would be hard pressed to pick a worse time to add barrels,” Yawger said. REUTERS