Oil prices surged on Thursday, June 20, following a rally in equity markets. This rally was spurred by optimism over economic recovery and a decline in US crude stockpiles, according to Bloomberg.
Specifically, Brent crude reached $75 per barrel, while West Texas Intermediate (WTI) climbed to $72 per barrel during midday trading. This increase reflects heightened investor confidence in economic growth and stronger demand expectations, contributing to the upward momentum in oil prices on that day.
Oil Prices in the US Economy
The rally in oil prices was also fueled by positive sentiment across global financial markets, as investors cheered strong corporate earnings and signs of strong economic growth.
This optimism extended support to commodities, including oil, as demand outlook improved amid expectations of increased travel and industrial activity.
Adding further support to oil prices, Yahoo Finance reported that the Energy Information Administration (EIA) reported a major decrease in US crude inventories for the second consecutive week. The latest data showed a decline of 5.2 million barrels, exceeding analysts' expectations of a 3.4 million barrel drawdown.
This inventory drawdown signaled strong demand for crude oil in the world's largest oil-consuming nation.
This recent increase in oil prices is occurring against persistent geopolitical tensions and supply uncertainties, especially in major oil-producing areas such as the Middle East and Russia. These concerns are keeping oil prices steady, even though they can go up and down at any moment.
Because oil prices are unpredictable, investors and experts are watching closely to see how global events and economic trends might affect them. As VCPost reported earlier this month, oil prices are expected to hit above $81 in 2024's third quarter due to summer demand.
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