Investing.com — Oil prices rose Thursday, extending gains from the previous session, thanks to favorable inflation and an unexpected drop in U.S. gasoline inventories, helping to boost some confidence in future demand.
At 08:50 ET (12:50 GMT), the stock rose 0.9% to $72.77 per barrel, while it rose 0.9% to $69.20 per barrel.
U.S. gasoline stocks are seeing major traction
Government data released Wednesday shows the U.S. shrank by 0.5 million barrels (mb) last week, compared with expectations for a 1.5 mb increase.
Gasoline inventories in particular saw a large decline, at 2.7 mb, compared to estimates for an expansion of 0.6 mb.
These figures gave some hope that oil markets in the world’s largest fuel consumer remained tight, and that fuel demand would still be robust even as the winter season approaches.
The tone was partly set by news that an inflation measure closely watched by the Federal Reserve slowed as expected in the year to September, potentially strengthening the case for the central bank to cut rates again this year could strengthen.
Yields slowed during the month to an annual increase of 2.1%, cooling after an upwardly revised 2.3% rate in August.
Lower interest rates are expected to boost economic activity in the world’s largest economy, potentially increasing demand for crude oil.
OPEC+ could delay December production increase – Reuters
In addition, Reuters reported that OPEC+ could delay plans to start increasing production from December by a month or more, amid concerns about weak demand and high supply.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, had postponed plans to increase production by 180,000 barrels per day (bpd) from October to December due to falling oil prices, amid concerns about slowing growth in China and fears for the Middle East. The Eastern war battered the oil markets.
The cartel had also lowered its demand growth forecast for 2024 and 2025, citing weakness in China.
OPEC+ cut production by about 5.86 million barrels per day over the past two years to support oil prices, and had announced plans to increase production from the end of 2024.
The Reuters report helped lift oil prices on Wednesday, although they still suffered steep losses from earlier in the week. Brent was also trading just a few dollars above the 2024 low it reached in September.
(Ambar Warrick contributed to this article.)
