Oil Prices Dip as Interest Rate Concerns Grow

On Friday morning, oil prices went down a little bit. This happened because people are worried that interest rates might stay high for a longer time in Asia and the United States. However, the drop in oil prices wasn’t too big because U.S. oil supplies have been going down.

The price of Brent oil for August delivery went down by 11 cents, making it $85.60 for a barrel. U.S. crude oil also dropped by 9 cents, reaching $81.20 per barrel.

Japan’s Inflation Raises Concerns

In Japan, the prices of everyday things went up by 2.5% compared to last year. This increase was bigger than the month before. Because of this, people think the Bank of Japan might raise interest rates in the coming months.

U.S. Job Market Remains Strong

In the United States, fewer people asked for unemployment help in the week ending June 14. This shows that the job market is still doing well. When many people have jobs, it might make the U.S. Federal Reserve keep interest rates high for a longer time.

How Higher Interest Rates Affect Oil Prices

When interest rates are high, it can slow down the economy. This usually means that people and businesses use less oil. So, when interest rates might stay high, oil prices often go down.

U.S. Oil Supplies Decrease

Even though oil prices went down a little, they didn’t fall too much. This is because the amount of oil stored in the U.S. has been going down. The government reported that oil supplies dropped by 2.5 million barrels in the week ending June 14. Now, there are 457.1 million barrels of oil stored. This was a bigger drop than what experts thought would happen.

Gasoline Supplies Also Fall

The amount of gasoline stored in the U.S. also went down. It decreased by 2.3 million barrels, leaving 231.2 million barrels. This was surprising because experts thought gasoline supplies would actually go up.

Summer Driving Season Begins Strong

Bob Yawger, who works at Mizuho in New York and knows a lot about oil, said that gasoline use is finally picking up. This is good news for the summer, when many people drive more and use more gasoline.

What This Means for Oil Prices

Oil prices are being pulled in different directions right now. On one hand, worries about high interest rates are pushing prices down. On the other hand, the decrease in oil and gasoline supplies is helping to keep prices from falling too much.

As we move into summer, more people might use gasoline for driving trips. This could help keep oil prices from falling a lot. However, if interest rates stay high, it might slow down the economy and reduce oil use in the long run.

For now, oil prices are staying pretty steady, with small changes happening as new information comes out. People who watch oil prices will keep paying attention to interest rates, oil supplies, and how much gasoline people are using this summer.