By Nicole Jao
NEW YORK (Reuters) -Oil prices rose on Thursday, recovering from two-week lows, after data showed crude and fuel inventories in the United States fell.
futures settled at $74.45 a barrel, up 23 cents, or 0.31%. U.S. West Texas Intermediate crude futures fell 28 cents, or 0.4%, to $70.67 a barrel.
Both benchmarks fell on Wednesday, closing for the second day in a row at their lowest levels since October 2, after OPEC and the International Energy Agency cut demand forecasts for 2024 and 2025.
Inventories fell 2.2 million barrels to 420.6 million barrels in the week ended Oct. 11, the Energy Information Administration said Thursday, compared with analysts’ expectations in a Reuters poll for a rise of 1.8 million barrels . Gasoline and distillate stocks also fell last week.
“What this tells me is that operating efficiency continues to improve,” said Tim Snyder, chief economist at Matador Economics. “The markets are normalizing.”
Oil production in North Dakota, the third-largest producing state in the US, fell by about 500,000 barrels through October after wildfires reached key producing counties this month, a regulator said.
The European Central Bank cut interest rates for the third time this year on Thursday, signaling that inflation in the eurozone is now increasingly under control and that the economic outlook has deteriorated.
This decision is expected to push up oil prices as it makes borrowing cheaper, potentially boosting demand.
But fears that a retaliatory strike by Israel on Iran for the October 1 Iranian missile attack could disrupt oil supplies kept prices steady, although uncertainty remains about how the Middle East conflict will develop.
“The country’s upcoming retaliation against Iran is still unclear,” said John Evans of oil broker PVM.
Evans added that the Middle East “will certainly provide ample reason for oil prices to move again soon enough and that investors today will also be preoccupied with a glut of financial data.”
The dollar jumped to an 11-week high on Thursday, also erasing some gains. A firmer U.S. currency could hurt dollar oil demand from buyers using other currencies.
Investors are also awaiting further details from China on the broad plans announced on October 12 to revive the ailing economy, including efforts to support the ailing real estate market.
