Economic news
10.05.2024

Oil prices are showing positive dynamics

Oil prices rose about 0.6%, helped by increased risk appetite among investors and a reassessment of the Fed's monetary policy easing prospects. Ongoing geopolitical tensions in the Middle East and signs of stronger demand in China also supported prices, while a stronger US currency kept oil gains in check.

The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.10% to 105.32.

As for the situation in the Middle East, Israeli forces bombed areas of Rafah city in southern Gaza yesterday after the latest round of talks on the cessation of hostilities in Gaza failed. Experts warn that recent events increase the likelihood of a larger conflict in the region, especially in Iran, the main oil producer.

Meanwhile, the latest US data indicates a slight weakening in the jobs market, bolstering expectations that the Fed's interest-rate cuts may happen sooner than previously expected. Lower interest rates reduce consumer borrowing costs, which can contribute to economic growth and oil demand.

Gradually, the focus of investors' attention is shifting to the OPEC+ meeting, which will be held on June 1, while market participants expect that the current oil production restrictions will be extended, possibly to the year-end.

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