By Katya Golubkova
TOKYO (Reuters) – Oil prices extended gains from the previous session on Thursday on signs of stronger demand in the United States, where data showed inflation was slower than markets had expected, strengthening the case for a cut in interest rates that could result in even stronger demand.
Brent futures rose 42 cents, or 0.5%, to $83.17 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 43 cents, or 0.6%, to $79. 06 at 00:32 GMT.
US consumer prices rose less than expected in April, boosting financial market expectations of a September rate cut by the Federal Reserve, which could moderate the strength of the dollar and make oil more affordable to holders of other coins.
U.S. crude oil, gasoline and distillate inventories fell, reflecting a rise in refining activity and fuel demand, data from the Energy Information Administration (EIA) showed.
Crude oil inventories fell 2.5 million barrels to 457 million barrels in the week ended May 10, the EIA said, versus analysts’ consensus forecast of 543,000 barrels in a Reuters poll.
Signs of slowing inflation and stronger demand supported prices, ANZ Research said in a note to clients, as did geopolitical risk, which it said remained high.
In the Middle East, Israeli troops fought Hamas militants in Gaza, including Rafah, which had been a civilian refuge.
Ceasefire negotiations brokered by Qatar and Egypt are at an impasse, with Hamas demanding an end to attacks and Israel refusing until the group is annihilated.
Gains were limited after the IEA lowered its forecast for oil demand growth in 2024, widening the gap between its vision and that of the OPEC producer group.
Global oil demand this year will grow by 1.1 million barrels per day (bpd), the IEA said, a drop of 140,000 bpd from its previous forecast, largely due to weak demand in developed countries. Economic Cooperation and Development.
(Reporting by Katya Golubkova; Editing by Christopher Cushing)
