LONDON: Oil futures climbed on Thursday after the US Energy Information Administration (EIA) reported a draw crude oil and following data showing a cooling jobs market that stoked hopes the Federal Reserve could cut interest rates sooner.
Brent crude futures were up 54 cents, or 0.63 per cent, to $85.61 a barrel by 1305 CDT (1805 GMT). The session high of $85.89 was the highest since May 1.
US West Texas Intermediate (WTI) futures for July, which expire on Thursday, gained 75 cents, or 0.94pc to $82.32.
“The market is definitely getting a bounce,” said Phil Flynn, analyst with Price Futures Group.
Crude inventories fell by 5.9 million barrels in the week to June 15, compared with analysts’ expectations for a decrease of 1.9 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.3 million barrels, EIA said.
There was no WTI settlement on Wednesday because of a US public holiday, which kept trading largely subdued. The more active August contract was up 60 cents at $81.31.
The number of Americans filing new claims for unemployment benefits fell last week.
Labour market momentum has ebbed in tandem with the overall economy as the Fed has tightened policy to fight inflation. With that pressure subsiding, a rate cut this year remains on the table.
Lower rates could support oil prices, which have been dragged this year by lacklustre global demand. A US rate cut would make borrowing cheaper in the world’s largest economy, galvanizing the appetite for oil as production picks up.
Oil prices are also likely to remain supported by a growing geopolitical risk premium driven by conflict in the Middle East, said ActivTrades analyst Ricardo Evangelista.
Published in Dawn, June 21st, 2024
