Oil prices rise as Fed-driven rebound brings first positive week in 8

investing.com:

Investing.com-- Oil prices rose slightly in Asian trade on Friday, and were set to snap a seven-week losing spree on optimism over interest rate cuts by the Federal Reserve and a positive outlook on demand from the International Energy Agency.

A drop in the dollar — to over four-month lows- greatly benefited crude markets, while traders also positioned for better demand in 2024, on the prospect of lower interest rates and a stronger U.S. economy.

This notion was furthered by the IEA, which slightly lifted its oil demand forecast for 2024. But the IEA’s forecast for demand was still much lower than that posited by the Organization of Petroleum Exporting Countries and allies (OPEC+).

Underwhelming production cuts from the cartel group were a key weight on oil in recent weeks, driving prices to over five-month lows. Even with a positive demand outlook for 2024, crude markets are still expected to remain well supplied.

This was also in part due to strong U.S. production, with recent data showing that total U.S. output remained close to record highs in the past week. U.S. inventories saw a bigger-than-expected drawdown, although fuel demand in the country remained weak, with gasoline inventories seeing a mild build.

Brent oil futures expiring February rose 0.3% to $76.84 a barrel, while West Texas Intermediate crude futures rose 0.3% to $72.14 a barrel by 20:31 ET (01:31 GMT).

Dovish signals from the Fed were a key support for commodity markets this week, as the central bank held rates steady in its final meeting for the year and flagged deeper-than-expected rate cuts in 2024.

Lower interest rates spur increased liquidity in markets, improving economic activity and driving up crude demand. A weaker dollar also benefits