BENGALURU: Oil prices rose more than $2 a barrel on Thursday on hopes for a pause in U.S. interest rate hikes and passage of the debt ceiling bill in the House of Representatives helped offset data showing rising inventories in the world's biggest oil consumer.
Brent crude futures rose $2.25, or 3.1%, to $74.85 a barrel by 11:50 a.m. EDT (1550 GMT). U.S. West Texas Intermediate crude (WTI) rose $2.49, or 3.7%, to $68.16.
Prices fell on Tuesday and Wednesday.
U.S. Federal Reserve officials on Wednesday suggested interest rates could be steady this month and the House passed a bill suspending the government's debt ceiling, improving chances of averting a disastrous default.
"The successful debt ceiling negotiations clears that minefield, but the overall demand outlook is still murky – the trucking space is doing poorly, for example," CFRA Research analyst Stewart Glickman said.
The oil market is focusing on the June 4 meeting of OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, which will discuss whether to cut oil production further.
Four sources from the alliance told Reuters OPEC+ is unlikely to deepen supply cuts at the Sunday meeting despite a fall in oil prices toward $70 a barrel.
However, some analysts refused to rule out another production cut from OPEC+, citing mixed demand indications from China, the world's biggest oil importer, and rising crude inventories in the U.S.
"Third Bridge experts would not rule out more aggressive actions from OPEC+, but the tug-of-war right now in the market is the seasonal versus the cyclical," said Third Bridge analyst Peter McNally.
"We are watching to see how strong the developed world's summer demand uptick will be relative to the struggles of China's cyclical recovery. This will determine how effective OPEC+ will be," he said.
U.S. crude oil stockpiles rose unexpectedly last week, as imports jumped and strategic reserves dropped to their lowest since Sept. 1983, according to data from the Energy Information Administration.
The build in inventories in the week just prior to Memorial Day holiday, which traditionally marks the start of peak driving season in the U.S., reflects poorly on the broader economy, Mizuho analyst Robert Yawger said.