Oil prices rise as oil and gasoline inventories dwindle

By Arathy Somasekhar

(Reuters) – Oil prices rose on Thursday as crude inventories fell after U.S. refineries increased processing and gasoline inventories drew down, signaling stronger demand.

Brent futures rose 35 cents, or 0.4%, to $85.43 a barrel. West Texas Intermediate (WTI) crude oil rose 36 cents, or 0.5%, to $82.47 a barrel.

US crude oil inventories fell 3.4 million barrels to 445.1 million barrels in the week ended July 5, far exceeding analysts’ expectations in a Reuters poll of a draw of 1.3 million of barrels.

Gasoline inventories fell 2 million barrels to 229.7 million barrels, much higher than the 600,000 barrel consumption expected by analysts during the July 4th holiday week in the US.

The Organization of the Petroleum Exporting Countries also maintained its forecast for relatively strong growth in global oil demand in 2024 and next year, saying on Wednesday that resilient economic growth and air travel would support fuel use in the coming months. of summer.

Gains were, however, limited as supply disruptions at refineries and offshore production facilities due to Hurricane Beryl were minimal.

Meanwhile, US inflation data due this week includes the Consumer Price Index on Thursday and the Producer Price Index report on Friday, both of which could set the tone for the market. .

Expectations for a 25 basis point rate cut by September have risen to 74% from around 70% on Tuesday and 45% a month ago, according to CME’s FedWatch.

Lower interest rates lower the cost of borrowing, which can boost economic activity and oil demand.

Federal Reserve Chairman Jerome Powell said on Wednesday that the US central bank will make interest rate decisions “as and when” they are needed, rejecting the suggestion that a rate cut in September could be seen as a political act ahead of the fall presidential elections.

(Reporting by Arathy Somasekhar in Houston; Editing by Muralikumar Anantharaman)