LONDON: Oil futures rose on Thursday bolstered by slower than expected inflation and a stabilising U.S. job market, providing positive signs for future rate cuts and demand.
Brent crude futures were up 88 cents, or 1.1%, at $83.63 a barrel by 1330 GMT. U.S. West Texas Intermediate crude (WTI) gained $1.09, or 1.4%, to $79.72.
The number of Americans filing new claims for unemployment benefits fell last week, pointing to underlying strength in the labor market.
The steadying labor market and easing inflation raise odds of a September rate cut.
“(Prices are) lifted by investors raising bets on the U.S. Federal Reserve cutting rates this year after the country reported a dip in consumer inflation in April,” Vandana Hari, founder of oil market analysis provider Vanda Insights said.
Brent had touched an intra-day low of $81.05 on Wednesday - the lowest the front-month futures contract has traded since Feb. 26 - but recovered to about 0.5% higher on the day.
U.S. crude oil, gasoline and distillate inventories fell, reflecting a rise in both refining activity and fuel demand, Energy Information Administration (EIA) data showed.
Crude inventories fell by 2.5 million barrels to 457 million barrels in the week ended May 10, the EIA said, versus the 543,000 barrel consensus analyst forecast in a Reuters poll.
“With refinery runs increasing by 1.9% there suddenly became a whiff of demand. This then caused the handbrake turn in price fortunes and the verve shown in earlier selling was called and raised by buying that saw all losses erased,” said PVM analyst John Evans.
U.S. consumer prices rose less than expected in April in a boost to financial market expectations for a September cut to interest rates by the Federal Reserve, which could temper dollar strength and make oil more affordable for holders of other currencies.
In the Middle East, Israel’s tanks pushed into the heart of Jabalia in northern Gaza on Thursday while, in the south, its forces pounded Rafah without advancing, Palestinian residents and militants said.
Ceasefire talks mediated by Qatar and Egypt are at a stalemate, with Hamas demanding an end to attacks and Israelrefusing until the group is annihilated.
Comments