Oil prices rise on bigger-than-expected drop in US crude stocks
Shafaq News/Oil prices extended gains from the previous session on Thursday, buoyed by abigger-than-expected decline last week in crude stockpiles in the UnitedStates, the world's largest oil consumer.
Brentfutures rose 32 cents, or 0.4%, to $85.40 a barrel by 0340 GMT, while U.S. WestTexas Intermediate (WTI) crude gained 48 cents, or 0.6%, to $83.33.
Bothcontracts settled higher on Wednesday.
U.S. crudeinventories fell by 4.9 million barrels last week, the latest data from theU.S. Energy Information Administration showed. That exceeds a decline of 30,000barrels forecast by analysts in a Reuters poll and a drop of 4.4 millionbarrels in a report from the American Petroleum Institute trade group.
"Healthydemand signals from the U.S. outweighs concerns from modest Chinese growth lastweek," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
"Hopesof a Fed easing, which can boost economic growth, and current summer travel inthe U.S. are ensuring enough traction in oil demand from the world's largesteconomy," Sachdeva said.
Theprospects of cuts in interest rates in coming months in the both the U.S. andEurope helped to support the market.
Federal Reserveofficials said on Wednesday the U.S. central bank is "closer" tocutting interest rates given inflation's improved trajectory and a labourmarket in better balance, possibly setting the stage for a reduction inborrowing costs in September.
Also, U.S.economic activity expanded at a slight to modest pace from late May throughearly July with firms expecting slower growth ahead.
The EuropeanCentral Bank, meanwhile, is all but certain to keep interest rates unchanged onThursday, but signalled that its next move is likely to be a cut.
Investorsare also awaiting policy news from a key leadership gathering in China that isto end on Thursday.
The dollareased on Thursday for a third straight session. A weaker dollar can boostdemand for oil by making greenback-denominated commodities like oil cheaper forholders of other currencies.
(Reuters)
