Oil prices rise after positive U.S. economic data
LONDON (Reuters)—Oil futures rose on Thursday bolstered by slower than expected inflation and a stabilizing U.S. job market, providing positive signs for future rate cuts and demand.
Brent crude futures were up $0.88, or 1.1%, at $83.63/bbl. U.S. West Texas Intermediate crude (WTI) gained $1.09, or 1.4%, to $79.72.
The number of Americans filing new claims for unemployment benefits fell last week, pointing to underlying strength in the labor market.
The steadying labor market and easing inflation raise odds of a September rate cut.
"(Prices are) lifted by investors raising bets on the U.S. Federal Reserve cutting rates this year after the country reported a dip in consumer inflation in April," Vandana Hari, founder of oil market analysis provider Vanda Insights said.
Brent had touched an intra-day low of $81.05 on Wednesday—the lowest the front-month futures contract has traded since Feb. 26—but recovered to about 0.5% higher on the day.
U.S. crude oil, gasoline and distillate inventories fell, reflecting a rise in both refining activity and fuel demand, U.S. Energy Information Administration (EIA) data showed.
Crude inventories fell by 2.5 MMbbl to 457 MMbbl in the week ended May 10, the EIA said, versus the 543,000 barrel consensus analyst forecast in a Reuters poll
"With refinery runs increasing by 1.9% there suddenly became a whiff of demand. This then caused the handbrake turn in price fortunes and the verve shown in earlier selling was called and raised by buying that saw all losses erased," said PVM analyst John Evans.
(Additional reporting by Katya Golubkova in Tokyo and Emily Chow in SingaporeEditing by David Goodman and Franklin Paul)
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