Oil prices rose on Thursday, recovering some of the previous day’s loss, on hopes of potential U.S. interest rate cuts boosting economic activity and fuel demand, though lingering concerns over slower global demand capped gains, reports Reuters.
Brent crude futures climbed 17 cents, or 0.2%, to $79.93 a barrel by 0029 GMT. U.S. West Texas
Intermediate crude increased by 23 cents, or 0.3%, to $77.21 per barrel.
Both benchmarks fell more than 1% on Wednesday after U.S. crude inventories rose unexpectedly and on easing worries about a wider Middle East conflict.
U.S. consumer prices rose moderately in July and the annual increase in inflation slowed to below 3% for the first time in nearly 3-1/2 years, reinforcing expectations the Federal Reserve will cut interest rates next month.
“We saw a correction in Asia trade as the oil market was oversold on Wednesday,” said Yuki Takashima, economist at Nomura Securities, adding that investors are betting the Fed could start cutting rates next month.
“Still, oil prices are expected to stay under pressure going forward as concerns persist that global demand, especially in China, will be sluggish,” Takashima said, predicting WTI will head towards the $72 mark in early August.
U.S. crude oil stockpiles rose by 1.4 million barrels in the week ended Aug. 9, compared with estimates for a 2.2 million barrel draw, building for the first time since late June, Energy Information Administration (EIA) data showed on Wednesday.
Earlier this week, the International Energy Agency trimmed its 2025 estimate for oil demand growth, citing the impact of a weakened Chinese economy on consumption.
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That came after OPEC cut expected demand for 2024 for similar reasons
Globally, jet fuel demand is also poised to soften as a slowdown in consumer spending hits travel budgets, a shift that could weigh on oil prices in the months ahead.
Offsetting demand concerns and supporting oil prices, investors remain nervous about Iran’s potential response to the killing of the leader of the Palestinian Islamist group Hamas last month.
Three senior Iranian officials have said that only a ceasefire deal in Gaza would hold Iran back from direct retaliation against Israel for the assassination.
Hamas said on Wednesday it would not take part in a new round of Gaza ceasefire talks slated for Thursday in Qatar, dimming hopes for a negotiated truce.
