Oil prices rose on Thursday with positive demand outlook in the US, supported by inventory data from the Energy Information Administration (EIA) and rate cut signal from the US Federal Reserve (Fed).
International benchmark Brent crude traded at $85.48 per barrel at 11.20 a.m. local time (0820 GMT), an increase of 0.47% from the closing price of $85.08 per barrel in the previous trading session.
The American benchmark West Texas Intermediate (WTI) traded at $81.91 per barrel at the same time, a 0.58% rise from the previous session that closed at $81.44 per barrel.
US commercial crude oil inventories decreased by 4.9 million barrels to 440.2 million barrels during the week ending July 12, according to data released by the Energy Information Administration (EIA) late Wednesday.
The drop in inventory was well above market prediction of around 900,000 barrels.
Data showing a decline in crude stocks in the US, the world’s largest oil consuming country, indicated an increase in demand appetite in the country and supported the upward movement in oil prices.
The Fed is getting closer to an interest rate cut as inflation is slowing, Fed Governor Christopher Waller said Wednesday.
Expectation that the Fed will start reducing policy interest rates soon also supports that economic activity in the country will increase.
The US Federal Reserve is expected to cut interest rates in December, following an anticipated reduction in September, with the European Central Bank likely to follow suit during the same period.
Conflict continues in the Middle East, where most of the global oil reserves are located. Concern that ongoing conflict may cause disruption in global oil supply continues to push oil prices up.
Israel’s attacks on the Gaza Strip and conflicts in the Red Sea, which is critical for global maritime trade, continues to affect prices.
Israel, who has been attacking the Gaza Strip since Oct. 7, 2023, is also fighting with Lebanese Hezbollah on the northern border.
