Oil prices rise on demand outlook strength, weaker US dollar
Shafaq News/ Oil prices rose onThursday, boosted by a strong outlook for demand in the United States afterfuel inventories fell more than expected, and a weaker U.S. dollar.
Brent crude futures rose 43 cents,or 0.6%, to stand at $71.21 a barrel by 0423 GMT, their highest level sinceMarch 3. U.S. West Texas Intermediate crude (WTI) gained 38 cents, or 0.6%, to$67.54.
U.S. government data showed ahigher-than-expected drawdown last week in distillate inventories, includingdiesel and heating oil, which fell by 2.8 million barrels, outstripping a dropof 300,000 barrels expected in a Reuters poll.
"U.S. oil demand outlookremains healthy despite lower air travel passenger volumes," JP Morgananalysts said in a note, adding that reduced U.S. travel activity did notsignal broader weakness in demand outlook.
Global oil demand averaged 101.8million barrels per day (bpd), an annual increase of 1.5 million bpd, theanalysts said.
U.S. crude inventories, rose 1.7million barrels, however, exceeding expectations for an increase of 512,000barrels in an earlier Reuters poll.
A weaker greenback also contributedto oil gains, with the dollar on a downtrend since the end of February.
"Throughout the week, theweakness of the dollar appeared to provide some support for dollar-denominatedoil prices," said Phillip Nova senior market analyst Priyanka Sachdeva.
Oil investors stay hopeful of theprospect of the Federal Reserve easing interest rates by 50 basis points byyear's end, she added.
Global risk premiums rose afterIsrael launched a new ground operation on Wednesday in Gaza after breaking aceasefire of nearly two months.
The United States kept up airstrikeson Houthi targets in Yemen in retaliation for the group's attacks on ships inthe Red Sea. U.S. President Donald Trump has also vowed to hold Iranresponsible for future Houthi attacks.
On Wednesday, Ukrainian PresidentVolodymyr Zelenskiy said a halt to strikes on energy facilities in the war withRussia could come quickly, suggesting both sides were moving closer to aceasefire that could lead to the easing of sanctions and the return of Russiansupply to the market.
Trump's Middle East envoy, SteveWitkoff, has said another round of talks will be held in Saudi Arabia on Sundayby Russian and U.S. officials aiming to halt the war.
(REUTERS)
