By Adedapo Adesanya
Crude oil closed mixed on Thursday as investors wrestled with diverse signals about demand as concerns about an economic slowdown in the US contended with rising expectations the Federal Reserve would soon cut interest rates.
As a result, Brent futures settled at $85.11 a barrel after gaining 3 cents, while the US West Texas Intermediate (WTI) crude fell by 3 cents to trade at $82.82 a barrel.
Economic data showed that the number of Americans filing new applications for unemployment benefits rose more than expected last week, while initial claims for state unemployment benefits increased by 20,000 to a seasonally adjusted 243,000 for the week ended July 1.
The data strengthened the case for the US Federal Reserves to speed up rate-cutting plans, which could spur more spending on oil.
Officials of the US central banks said on Wednesday that it was closer to cutting rates given inflation’s improved trajectory and a labour market in better balance, with September the next possible target.
US economic activity expanded at a slight to modest pace from late May through early July, with firms expecting slower growth ahead, according to a report released by the Federal Reserve on Wednesday.
Market analysts noted that the rising jobless claims, however, also signalled an economic easing that could cut into crude demand, and keep oil prices from moving higher.
Economic growth in China, which is the biggest importer of crude oil, also weighed on prices with the Chinese government signalling on Thursday that it would stay the course with economic policy.
This signalled helped hopes of a push to boost consumption in the world’s second-largest economy.
Meanwhile, the European Central Bank (ECB) kept interest rates unchanged as expected and gave no hints about its next move, arguing that domestic price pressures remain high and inflation will be above its target well into next year.
A small sub-group of the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ ministerial meeting has been scheduled for early August.
The group known as the Joint Ministerial Monitoring Committee meeting (JMMC), will hold an online meeting on August 1 to review the health of the oil market.
However, Reuters reported that it is unlikely to recommend changing the group’s oil output policy, which includes a plan to start unwinding one layer of crude output cuts from October.