Oil prices rose from the previous session on Thursday on signs of stronger demand in the US, where data showed inflation slower than markets expected, and bolstering arguments for interest rate cuts that could lead to more consumption.
Brent futures increase 32%, or 0.4%, to $83.07 a barrel at 0620 GMT, while U.S. West Texas Intermediate crude (WTI) increase 31%, or 0.4%, to $78.94.
IG Markets strategist Yep Jun Rong said that “the more restrained reading for US April inflation and the weaker-than-expected reading in US retail sales provide room for the Fed to consider an earlier rate cut, raising market expectations and “Are growing more strongly. The policy relaxation will start in September this year”.
“The larger-than-expected decline in U.S. crude inventories last week also provided some solace, while geopolitical tensions continue in the Middle East.”
US consumer prices rose less than expected in April, boosting financial market expectations of a rate cut by the Federal Reserve in September, which could reduce dollar strength and make oil more reasonable for holders of other currencies.
Elsewhere, U.S. crude oil, gasoline and distillate stockpiles declined, reflecting growth in both refining activity and fuel demand, Energy Information Administration (EIA) data showed.
The EIA said crude oil inventories fell 2.5 million barrels to 457 million barrels in the week ended May 10, compared with analysts’ estimate of 543,000 barrels in a Reuter’s poll.
ANZ Research also said in a client note that signs of slowing inflation and strong demand were supporting prices, with geopolitical risks remaining elevated.
In the Middle East, Israeli troops battled Hamas militants throughout Gaza, including Rafah, a haven for civilians.
Cease-fire talks brokered by Qatar and Egypt are at an impasse, with Hamas demanding an end to attacks and Israel refusing until the group is eliminated.
Gains were hampered after the IEA cut its 2024 oil demand growth forecast, widening the gap between its outlook and that of producer group OPEC.
The IEA said global oil demand will rise by 1.1 million barrels per day (bpd) this year, 140,000 bpd less than its previous forecast, mainly due to weak demand in developed countries of the association for Economic Co-operation and Development.
Crude oil prices growth due to slow US inflation, strong demand
