Oil prices climbed on Thursday driven by a positive demand outlook in the US, bolstered by inventory figures from the Energy Information Administration (EIA) and signals of potential interest rate cuts from the US Federal Reserve (Fed).
Brent crude, the international benchmark, traded at $85.48 per barrel at 11:20 a.m. local time (0820 GMT), marking a 0.47% increase from the previous day’s close of $85.08 per barrel.
Meanwhile, West Texas Intermediate (WTI), the American benchmark, traded at $81.91 per barrel at the same time, reflecting a 0.58% rise from its previous session close of $81.44 per barrel.
According to the EIA, US commercial crude oil inventories fell by 4.9 million barrels to 440.2 million barrels for the week ending July 12, surpassing market expectations of a smaller decline around 900,000 barrels. This substantial decrease in inventories pointed to increased demand in the world’s largest oil-consuming nation, contributing to the upward pressure on oil prices.
Federal Reserve Governor Christopher Waller’s comments on Wednesday suggesting a potential interest rate cut due to slowing inflation further supported market sentiment. The expectation of imminent rate cuts by the Fed aimed at boosting economic activity added to the bullish outlook for oil prices.
Geopolitical tensions in the Middle East, home to a significant portion of global oil reserves, continued to influence market dynamics. Ongoing conflicts such as Israel’s military actions in the Gaza Strip and confrontations in the Red Sea, a critical route for maritime trade, heightened concerns over potential disruptions to global oil supply, thereby contributing to the upward trend in oil prices.
Overall, the combination of positive demand indicators from the US and geopolitical uncertainties in key oil-producing regions underscored the upward trajectory of oil prices during Thursday’s trading session.
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