RIYADH: Oil prices climbed on Thursday after US inflation and economic data sparked hopes that the Federal Reserve may have fewer interest rate hikes in store.
Brent crude futures gained 21 cents, or 0.3 percent, to $80.32 per barrel at 9:30 a.m. Saudi time, while US West Texas Intermediate crude futures were up 13 cents, or 0.2 percent, at $75.88.
US data on Wednesday showed consumer prices rose modestly in June, registering the smallest annual increase in more than two years. Markets expect one more interest rate rise, but oil traders hope that it may be because higher rates can slow economic growth and reduce oil demand.
IEA lowers 2023 oil demand forecast on economic headwinds
Oil demand is set to hit a record high this year. Still, economic headwinds and interest rate hikes mean the increase will be slightly less than anticipated, the International Energy Agency said on Thursday.
While demand is expected to reach an average of 102.1 million barrels per day, the Paris-based energy watchdog lowered its growth forecast for the first time this year by 220,000 bpd.
“World oil demand is coming under pressure from the challenging economic environment, not least because of the dramatic tightening of monetary policy in many advanced and developing countries,” the IEA said in its monthly oil report.
China is due to make up more than two-thirds of this year’s demand growth as its post-pandemic economic rebound is set to gain pace, especially later in the year, the IEA said, adding that demand in developed countries and Europe remains subdued.
US crude stockpiles advanced last week: EIA
US crude stocks rose much more than expected last week as the country posted higher net imports, the Energy Information Administration said on Wednesday. At the same time, gasoline inventories were largely flat during the July 4 holiday week when analysts had expected a big draw.
Crude inventories rose by 5.9 million barrels in the week to July 7 to 458.1 million barrels, compared with analysts’ expectations in a Reuters poll for a 500,000-barrel rise.
The EIA said that net US crude imports rose last week by 599,000 bpd.
The principal agency added that US gasoline stocks were virtually unchanged, falling by just 3,000 barrels in the week to 219.5 million barrels.
The EIA data showed that Distillate stockpiles, including diesel and heating oil, rose by 4.8 million barrels in the week to 118.2 million, versus expectations for a 300,000 barrel drop.
US product supplied of gasoline — a proxy for demand — dropped by about 840,000 bpd to 8.8 million bpd. Product supplied of distillate also fell by about 840,000 bpd to nearly 3 million bpd.
