Oil Prices In Brief
Oil nudged up a hair, with WTI snapping up 0.4% and Brent gaining 0.26%. After a bumpy stretch that pushed prices to their lowest in over two months, the market finally found its footing.
What’s Behind the Though‑Backing‑Up?
- Eurozone’s private sector kept on the rise for the fourth straight month – flash PMI telltale that businesses are finally feeling better.
- Strong service activity lifted private‑sector confidence to a peak not seen since February 2022.
- Manufacturing, however, kept shrinking, so new orders stayed glacial. Still, the overall optimism could spark a wave of oil demand.
Germany: The Rising Star
Germany’s services grew faster than expected, giving the economy a general push‑up. This spurred demand and confidence, and the country even hit its biggest surge in new business flows in a full year.
France: A Tiny Dip, Still on the Upswing
May saw a slight catch‑up in private‑sector activity, but the contraction was modest. The French firms’ confidence in future business slipped to a four‑month low, yet the spirit of growth and client demand keeps them optimistic.
China’s Fuel Bonanza
EU’s economic boost is expected to send a positive ripple to China’s crude consumption. As the world’s biggest factory still grapples with weak internal demand, strong partner economies can help lift oil demand for the Big Three.
US Influence: Too Much Crude?
Last week, U.S. crude stocks swelled, putting pressure on the market. Added to that, the Fed Minutes reminded everyone that inflation targets remain elusive and that rates might hold steady for a while.
- Market remains hopeful for a 50% chance in September and a 47% chance in November to ease rates by 25 basis points.
- Fed’s “tightening narrative” is back, but expectations are still uncertain.
Geopolitical Risk: A Shadow Weakened
Oil has shed some of its previous geopolitical premium that rode the wave of Middle‑East tensions. As fears of a large‑scale regional war subside, oil’s risk premium keeps depreciating.
All told, oil’s subtle uptick looks like a cautious but confident grin—mirroring the market’s gradual recovery, economic optimism, and a flurry of supply‑side check‑ins. Stay tuned for more updates and keep your coffee handy!
