By Arathy Somasekhar
(Reuters) – Oil prices rose on Wednesday on expectations that major producers will maintain production cuts at a meeting on Sunday, while fuel consumption is expected to start rising as the season starts. peak demand in summer.
Brent crude futures for July delivery rose 27 cents, or 0.3%, to $84.49 a barrel by 0042 GMT. US West Texas Intermediate futures for July rose 35 cents, or 0.4%, to $80.18.
Traders and analysts expect the Organization of the Petroleum Exporting Countries and its allies, including Russia, known as OPEC+, to maintain voluntary production cuts totaling about 2.2 million barrels per day.
The Memorial Day holiday on Monday marks the start of the peak demand season in the US, the world’s biggest oil consumer, and continued production cuts should keep prices supported as consumption increases.
“Early data suggests that a relatively high number of U.S. holiday trips were taken during the Memorial Day holiday, the traditional start of the travel season. Air travel has also been strong,” said Daniel Hynes, senior commodity strategist from ANZ Bank, in a statement. observation.
The increase in fighting in the Gaza Strip, as Israeli tanks advanced into the heart of the Rafah section, also provided some support for prices, in a context of concerns about an extension of the conflict to the Greater Middle East, a key supply region .
Investors were also keeping an eye on U.S. crude oil inventories data from the American Petroleum Institute, which will be released later in the day. The data was delayed by a day due to the Memorial Day holiday on Monday.
U.S. crude oil inventories are expected to have fallen by about 1.9 million barrels last week, a preliminary Reuters poll showed on Tuesday.
Investors were also awaiting US inflation data this week that could influence expectations of interest rate cuts from the Federal Reserve, which could be positive for oil prices.
The main US Personal Consumption Expenditure Price Index report for April will be released later this week. The Fed’s preferred inflation barometer is expected to hold steady on a monthly basis.
Expectations regarding the timing of rate cuts have fluctuated, with policymakers cautious as data still reflects sticky inflation.
(Reporting by Arathy Somasekhar in Houston; Editing by Christian Schmollinger)
