Oil up 2%: How gasoline inventories and the US CPI impact a tense global market

The oil market saw a 2% rise after surprising data from the US. A drop in gasoline inventories and lower-than-expected inflation have rattled investors, with potential global repercussions on the price of the commodity.

In the global commodities scenario, the price of oil has proven to be one of the most sensitive thermometers for economic and political changes, with the market reacting strongly to each new piece of data or decision that impacts its production and consumption.

On a day of highs, oil futures contracts rose significantly, reaching a 2% appreciation, which generated reactions and questions about the behavior of this important commodity. But what motivated this movement in the market?

What no one expected, and which took analysts by surprise, was the combination of a substantial drop in US gasoline inventories and lower-than-expected inflation data.

It is precisely these factors that we will explore below, analyzing what is behind this rise and how the decisions of the USA, OPEC+ and world powers, such as Russia and Ukraine, directly influence the scenario involving oil on the international market.

Rising US Gasoline Inventories and Their Effects on the Oil Market

According to the latest data from the United States Department of Energy (DoE), the market for gasoline The North American market was marked by a big surprise: a drop of 5,7 million barrels in gasoline inventories last week.

This reduction exceeded analysts' forecasts, which predicted a much more modest decrease of just 1,1 million barrels. This movement, although good news for gasoline consumers, generated great volatility in the global oil market.

The reduction in gasoline inventories is a reflection of very strong domestic demand, as gasoline is one of the most consumed commodities in the United States, especially during periods of increased travel and commercial activity.

Furthermore, the price of fuel It is also directly reflected in the price of crude oil, since gasoline is one of the most important derivatives of a barrel of oil.

Mizuho analyst Robert Yawger noted that “Gasoline is the star of the show today and is dragging the rest of the barrel along for the ride after underperforming for weeks.” This means that the price of WTI and Brent crude oil rose in response to higher demand for gasoline and declining inventories.

Furthermore, rising oil prices are often a reflection of market expectations about supply shortages and rising demand.

Investors, aware of this relationship between gasoline and oil, reacted to these statistics with optimism, anticipating that refinery margins and oil production would benefit from this momentary shortage.

The Consumer Price Index (CPI) and the Market Surprise

Another important piece of data that helped boost the oil market was the release of the Consumer Price Index (CPI) in United States. The CPI, a key inflation indicator, rose just 0,2% in February, compared with a forecast of 0,3%.

This slowdown in inflation was welcomed by investors, who see this reduction in the pace of price increases as a sign that interest rate hikes may be less aggressive at upcoming Federal Reserve (Fed) meetings.

The impact of this data on the oil commodity was immediate. The market reacted positively to expectations that lower prices for goods and services could ease pressure on energy demand and reduce global economic uncertainty.

While the rising cost of oil also has an impact on consumer goods prices, the optimistic outlook on monetary policy has helped keep oil prices high.

OPEC+ and Production Increase Plans: The Future of 2024

Meanwhile, Organization of the Petroleum Exporting Countries (OPEC+) continues to be one of the most influential forces in the global energy market.

According to the portal THIS IS MONEY, OPEC+ forecast for global oil demand growth this year remains at an estimated 1,4 million barrels per day (bpd), reflecting the gradual recovery of the global economy. By 2026, the organization expects demand to rise to 106,63 million bpd.

However, the geopolitical situation and OPEC+'s plans to increase production remain in the spotlight. The market remains closely monitoring the organization's actions and the decisions it will make to balance supply and demand in the oil market.

An expansion in OPEC+ production could ease the rise in prices, while the maintenance of production restrictions could continue to boost the price of a barrel.

Donald Trump's Tariffs: How Past Actions Affect the Oil Market Today

While the oil market has reacted positively to the latest data, it is also being impacted by policy decisions dating back to the previous US administration.

The imposition of tariffs and other protectionist actions taken by Donald Trump, especially during his presidency, continue to influence the way oil is traded. Uncertainty over U.S. foreign policy and its trade relations with other oil-producing countries, such as Russia and Iran, continues to affect market stability.

While the previously imposed tariffs have not been completely reversed, they still have an impact on international trade, making the oil market more unpredictable and volatile. Many analysts believe the U.S. may need to adopt new strategies to deal with high prices and domestic production.

The Russia-Ukraine Conflict: A Factor of Uncertainty for the Global Oil Market

While positive gasoline data and lower inflation were largely responsible for the recent rise in oil prices, Another relevant factor for the global market is the ongoing conflict between Russia and Ukraine.

Ukraine’s recent decision to agree to a US-brokered ceasefire has raised some expectations of stability. However, analysts such as those at ING warn that the market continues to ignore uncertainty over what Russia’s position will be in the deal.

This uncertainty about the geopolitical situation in Eastern Europe could have significant effects on oil prices, as Russia is one of the world's largest oil producers and exporters.

Russia's stance on the ceasefire agreement could alter market dynamics, creating a risk factor for oil prices and global economic stability.

The Effects of Trump's Tariffs and Actions on the Oil Market

US foreign policy has direct repercussions on the oil market. When Donald Trump was in office, he implemented a number of protectionist measures, including tariffs on imported goods and stricter policies towards oil-producing countries. These decisions affected the global oil trade in ways that are still felt today.

One of the main consequences was the instability in trade relations with countries that dominate global oil production, such as Russia and Iran.

The imposition of tariffs and economic sanctions on these countries has affected their export capabilities and influenced the global price of oil, as these countries account for a significant portion of the world's supply.

For example, Trump's attack on Russia's oil and gas industry was seen as an attempt to undermine Moscow's influence in the energy market.

Continued uncertainty surrounding U.S. trade policies has contributed to a volatile environment in the oil market, a feature that persists, especially as the U.S. seeks new ways to address oil supply and demand issues.

The Influence of Geopolitical Decisions on the Global Market

It is impossible to talk about the price of oil without mentioning the fundamental role that geopolitics plays in defining its trajectory.

A Russia and Ucrania, both involved in an armed conflict since 2022, have become a point of attention for investors.

The Russian invasion of Ukraine and the subsequent international response with sanctions against Russia created a scenario of uncertainty in the oil market.

Even with the US-brokered ceasefire agreement, the situation remains volatile. Market analysts such as those at ING point out that Russia’s position on any future agreement is still a big unknown.

As one of the world's largest oil exporters, any change in Russia's stance could cause prices to rise or supplies to fall.

Political instability in Eastern Europe has caused significant disruption to the oil supply chain, as Russia and Ukraine are important components in the supply of energy resources to Europe and other regions.

Therefore, any new conflict or political disagreement can lead to unpredictable fluctuations in the price of a barrel of oil, directly affecting consumers and investors in the global market.

Post-Pandemic Recovery and Its Effects on the Oil Market

Another factor that will continue to influence the oil market in 2024 is the global economic recovery after the COVID-19 pandemic. The reopening of economies, especially in Asia and Europe, has led to a growing demand for energy, which includes not only oil but also natural gas and other energy sources.

With the return of economic activity, many countries are returning to pre-pandemic consumption levels, which has put further pressure on the consumer market. Petroleum.

The economic recovery, however, has also created challenges in the energy market. The growing demand for oil and other natural resources, combined with a supply that is still controlled by policies of OPEC+ and other major powers in the sector, has generated pressure on prices.

According to the OPEC+ forecast for 2024, global oil demand is expected to increase by 1,4 million barrels per day, a growth that reflects optimism about economic recovery in several parts of the world.

This increase in demand could be a crucial factor in keeping oil prices high, even with the challenges faced by producers.

The Interdependence of Production and Consumption: How Global Factors Influence Oil Prices

Oil prices are impacted by a complex network of interconnected factors. Among them, energy production and consumption stand out, two aspects that are in constant interaction in the global market. OPEC+ plays a leading role in regulating production, making decisions that directly affect the amount of oil available for the international market.

On the other hand, oil consumption is a variable that depends on economic and seasonal factors. In times of high demand, such as during the summer in the northern hemisphere, or in periods of strong economic growth, pressure on oil prices tends to increase. This phenomenon is amplified by the post-pandemic global economic recovery, which has brought back demand for fossil fuels, especially in the transportation and industrial sectors.

The Participation of Emerging Countries in the Oil Market

Another aspect that deserves attention is the growing demand for oil from emerging countries, especially in Asia and Latin America. Economic growth in these countries has driven a greater demand for energy, which is directly reflected in the increase in oil consumption.

In China, for example, one of the world's largest energy consumers, demand for oil has remained robust, putting additional pressure on global supply.

In Brazil, the oil market has also shown signs of recovery, with Brazilian oil exports expanding, which makes the country gain relevance on the global stage.

The Oil Path and the Outlook for 2024

In a year marked by economic and geopolitical challenges, the 2% rise in oil prices reflects a series of complex factors, from the decline in US gasoline inventories to the latest inflation data.

While economic recovery continues to be a driver for energy demand, the oil market remains vulnerable to factors such as OPEC+ politics, geopolitical conflicts and global economic uncertainties.

Investors, analysts and consumers should continue to pay attention to these factors, as the trajectory of oil in the coming months could be influenced by further changes in market conditions.

Price pressures, coupled with political and economic volatility, are expected to continue to defy forecasts and keep the global oil market in constant flux.