Oil prices increased on Friday with data showing strong demand from the US, world's largest oil consuming country, Trump's sanctions on major Russian energy companies and market player's expectations of higher interest rate cuts will boost economic activity leading to demand rises.
The international benchmark Brent crude increased by 0.3%, trading at $77.53 per barrel at 10.36 a.m. local time (0736 GMT), down from $77.30 at the close of the previous session.
The US benchmark West Texas Intermediate (WTI) increased by 0.4%, reaching $74.41 per barrel, compared to its prior session close of $74.13.
The US inventory data revealed a decline in crude stocks, signaling a global rise in oil demand. According to the Energy Information Administration (EIA), US commercial crude oil inventories fell 0.2% during the week ending January 17, dropping by about 1 million barrels to 411.7 million barrels, lower than the market prediction of 1 million barrels increase.
Meanwhile, US sanctions targeting Russia's oil production and exports continue to influence oil prices by fueling supply concerns among market participants.
On January 10, the US Department of the Treasury announced new sanctions aimed at reducing Russia's energy revenues. Major oil producers such as Gazprom Neft and Surgutneftegas were added to the sanctions list, along with over 30 Russian energy companies and executives. Gazprom Neft and Surgutneftegas together account for approximately 20% of Russia's total oil exports.
Meanwhile, statements from US President Donald Trump supporting global interest rate cuts added to market dynamics. His remarks suggested that increased economic activity in the US could boost demand, contributing to the rise in oil prices.
US President Donald Trump on Thursday vowed to push for immediate interest rate cuts during a speech at the World Economic Forum in Davos, Switzerland.
'With oil prices going down, I'll demand that interest rates drop immediately. And likewise, they should be dropping all over the world,' Trump said as he addressed the 55th annual World Economic Forum remotely.
Analysts' growing expectations of an interest rate cuts in the US, are poised to stimulate the nation's economy and fuel increased oil demand.
By Duygu Alhan and Humeyra Ayaz
Anadolu Agency
energy@aa.com.tr