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What’s happening: Crude oil prices settled higher on Thursday amid rising geopolitical concerns.
What happened: Continued weakness in the US dollar and China stimulus also lent support to crude oil prices.
However, the Energy Information Administration’s report showing a weekly decline in US gasoline demand resulted in oil prices remaining on track to closing the month in the red.
Why it matters: Earlier this week, US President Donald Trump had a call with Russian President Vladimir Putin to discuss a full ceasefire. However, Putin consented only to pausing strikes on energy and infrastructure assets in Ukraine for 30 days.
The outcome lowered expectations of a quick end to the war in Ukraine and of sanctions on Russian exports being lifted. Escalating geopolitical tensions in the Middle East added to supply concerns.
Fresh stimulus measures in China boosted the demand outlook from the largest importer of crude oil.
Some weakness in the US dollar lent further support to oil prices this morning, as a lower greenback makes commodities cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, slipped around 0.1% this morning.
Data released on Wednesday from the EIA showed that total finished motor gasoline supplied, a proxy for consumer demand, has declined to 8.817 million bpd (barrels per day) during the week ended March 14, compared to 9.182 million bpd in the previous week. This signalled declining demand for refined products amid rising concerns over the US economy.
Meanwhile, data released on Thursday showed US supplies of natural gas climbed by 9 billion cubic feet during the recent week, compared to market expectations of a decline of 12 billion cubic feet.
WTI crude for April delivery gained $1.10, or 1.6%, to close at $68.26 per barrel on the NYMEX (New York Mercantile Exchange) on Thursday. May WTI crude oil surged 1.7% to end at $68.07 per barrel on Thursday.
May Brent crude, the global benchmark, jumped 1.7% to close at $72 per barrel on ICE Futures Europe.
In other energy trading, April gasoline rose 1% to $2.19 a gallon on Thursday, while April heating oil gained 1% to $2.25 a gallon. Natural gas for April delivery bucked the trend and dipped 6.4% to close at $3.98 per million British thermal units.
What to watch: Investors will continue monitoring developments around the Russia-Ukraine war.
Data on Baker Hughes crude oil rigs (210 UAE Time) will also remain in focus today. Crude oil rigs in the US rose to 487 during the week ended March 14, from to 486 rigs in the previous week.
Context: UK’s FTSE 100 fell slightly on Thursday following the Bank of England’s interest rate decision.
Details: The Bank of England kept interest rates unchanged at 4.5% during its latest meeting, as was widely expected. BoE officials indicated further rate cuts this year due to uncertainty in the economic growth outlook amid rising tariff concerns.
The latest decision by the BoE came after the US Federal Reserve held its benchmark interest rates steady on Wednesday. The US central bank’s Chairman Jerome Powell also projected two rate cuts this year.
On the economic data front, average weekly earnings, including bonuses, rose by 5.8% year-over-year to £711 per week during the three months to January, slowing from a revised 6.1% increase in the previous period. The UK’s unemployment rate came in steady at 4.4% in the three-month period.
Bank stocks fell around 1.3% on Thursday, amid a decline in UK government bond yields. Shares of HSBC Holdings shed around 2% after the bank reportedly held talks to sell its German fund administration business.
Investec’s stock declined around 3% on Thursday after the company issued a disappointing annual profit guidance.
London’s FTSE 100 fell 0.05% to close at 8,701.99 on Thursday, while the domestically focussed FTSE 250 slipped 0.12% to settle at 20,097.98.
What to watch: Investors await the release of data on UK’s CBI industrial trends orders (1500 UAE Time) today. The Confederation of British Industry’s monthly net balance of new orders, which rose to -28 in February from -34 in the previous month, is expected to decline to a reading of -30 in March.
Other Markets: US trading indices closed lower on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 0.03%, 0.22% and 0.30%, respectively.
President Vladimir Putin’s aide Yuri Ushakov said Russian and US officials are scheduled to hold talks again on Ukraine in Saudi Arabia on Monday. The news sent the RUB/USD pair slightly lower in forex trading this morning.
UK’s GfK consumer confidence index rose by 1 point to -19 in March, following a reading of -20 in the previous month. The figure remaining in the negative zone exerted pressure on the GBP/USD forex pair.
Japan’s core consumer price index rose 3% year-over-year in February, slowing from a 3.2% increase in the previous month. However, the recent reading coming in higher than market expectations of 2.9% sent the JPY/USD pair lower in forex trading this morning.
New Zealand reported a trade surplus of $510 million in February, versus a year-ago deficit of $315 million, lending support to the NZD/USD forex pair.
Argentina’s unemployment rate declined to 6.4% in the fourth quarter, from 6.9% in the previous period. The region’s jobless rate eased to its lowest level since the fourth quarter of 2023, sending the ARS/USD pair higher in forex trading this morning.
Turkey’s tourist arrivals (1200 UAE Time), Eurozone’s current account (1300 UAE Time) and consumer confidence (1900 UAE Time), Italy’s current account (1400 UAE Time), Russia’s interest rate decision (1430 UAE Time), India’s foreign exchange reserves (1530 UAE Time), Canada’s new housing price index (1630 UAE Time) and retail sales (1630 UAE Time), US Baker Hughes total rigs count (2100 UAE Time), as well as Argentina’s retail sales (2300 UAE Time).
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