By the close of the trading session, Brent crude oil futures had dropped 62 cents, or 0.7%, settling at $83.60 per barrel. Similarly, US West Texas Intermediate (WTI) crude fell by 60 cents, or 0.8%, to $79.23 per barrel. This decline reflects market worries about economic stability and future demand for oil.
A recent survey showed an unexpected rise in US consumer confidence in May, breaking a three-month decline, mainly due to optimism about the labor market. However, inflation concerns persist, with many households expecting higher interest rates next year. Analysts from Gelber and Associates noted that forecasts for interest rate cuts are being delayed further, while Ritterbusch and Associates pointed out that gasoline demand has remained surprisingly weak.
Traders are now looking ahead to the Personal Consumption Expenditures (PCE) report, due on May 31. This report is closely watched as it is the Federal Reserve’s preferred measure of inflation and will provide insights into potential interest rate changes later this year.
On the supply side, attention is focused on the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+. They are expected to continue production cuts of about 2.2 million barrels per day at their upcoming meeting, aiming to balance the market amidst fluctuating demand and economic uncertainties.
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Source: Vietnam Insider