Crude oil edges higher as U.S. inflation reading bolsters rate cut hopes (NYSEARCA:USO)

Crude oil futures rose for a second straight session on Thursday, as a weaker-than-expected reading on U.S. inflation was seen increasing the chances of a September interest rate cut by the Federal Reserve.

The US government announced that the consumer price index fell. The U.S. inflation rate fell 0.1% in June, marking the first decline since May 2020, and the core consumer price index — which excludes volatile food and energy prices — rose just 0.1%.

Analysts generally believe that slowing inflation and lower interest rates will stimulate more economic activity, which supports higher oil prices.

“Although we have difficulty linking a potential rate cut to increased oil demand, positive inflation news appears sufficient to sustain speculative interest in the long side of energy futures,” Ritterbusch analysts say. booksAccording to the Dow Jones Index.

Traders also weighed the latest Monthly Oil Report For its part, the International Energy Agency made minor changes to its demand growth forecast, raising its 2024 estimate by 10,000 barrels per day to 970,000 barrels per day, while lowering its 2025 forecast by 20,000 barrels per day to 980,000 barrels per day.

The International Energy Agency said demand growth in the second quarter slowed to 710,000 barrels per day, the lowest quarterly increase in more than a year, as China’s oil consumption contracted in both April and May, while demand for industrial fuels and petrochemical feedstocks was particularly weak.

US Light Crude Oil for August (CL1:COM) settled +0.6% At $82.62 per barrel, Brent crude closed for the first month of the year (CO1:COM) +0.4% To $85.40 per barrel.

Exchange-traded funds:NYSEARCA: Use), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI)

The IEA’s forecast remains well below the more optimistic forecasts of OPEC, which earlier this week left its forecasts for demand growth in 2024 and 2025 unchanged at 2.2 million barrels per day and 1.8 million barrels per day, respectively.

The demand forecasts issued by the International Energy Agency and OPEC are:wider than usual“This is partly due to differences of opinion about the pace of the world’s transition to clean fuels,” according to StoneX analysts. Market monitoring.