Brent shrugs off broader market optimism, focusses on Fed comments

Front-month ICE Brent has declined further by $1.18/bbl on the day, to $83.10/bbl at 09.00 GMT.

PHOTO: Getty Images

Upward pressure:

The market is seeing signs of a demand recovery from China.

China reported a gross domestic product (GDP) growth of 4.5% in the first quarter of this year. The data was above market expectations, says Phil Flynn, senior account executive at The Price Futures Group.

Also, China’s oil refinery throughput surged to a record 14.9 million b/d in March, which indicates "robust oil demand" from the world's biggest oil importer, Phil adds.

US crude inventories have declined by 2.7 million bbls in the week ending 14 April, according to an American Petroleum Institute (API) estimate. The official US Energy Information Administration’s weekly data is scheduled for release today.

BP PLC's chief economist Spencer Dale has told Reuters that the global oil market is expected to tighten in the second half of this year due to the OPEC+'s decision to cut oil production.

Downward pressure:

The US Federal Reserve is expected to continue raising its benchmark interest rate, which could keep Brent futures under pressure.

In separate comments, Atlanta Federal Reserve President Raphael Bostic and St. Louis Federal Reserve President James Bullard have alluded to a further 25 basis point interest rate hike by the US central bank. 

Iraq's official state news agency has confirmed that Kurdish authorities met with Iraqi ministers to discuss the oil agreement between the two regions. The agreement will pave the way for up to 450,000 b/d of crude oil to be exported from Iraq's Kurdistan-operated northern oil fields to Turkey.

By Konica Bhatt

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