Oil prices climb amid decreasing US crude inventories

Oil prices experienced a boost in early trading on Thursday, driven by multiple factors including a decrease in US crude inventories, which suggests a tightening of supply. Brent crude futures for July delivery climbed 23 cents to reach $83.81 per barrel, while US West Texas Intermediate crude futures for June rose 29 cents to hit $79.28 per barrel.

The US Energy Information Administration’s report revealing a 1.4 million barrel decline in crude inventories to 459.5 million barrels, surpassing analysts’ expectations of a 1.1 million barrel decrease, contributed to the upward momentum. This decrease was accompanied by increased refinery activity.

However, the build-up of gasoline stocks, which unexpectedly rose by over 900,000 barrels to 228 million barrels during the same period, tempered the extent of the price increase.

Additionally, growing anticipation of a potential interest rate cut by the Federal Reserve later in the year, following disappointing job data, buoyed oil prices. A rate cut could potentially stimulate increased spending on crude oil.

Despite these bullish factors, hopes for a ceasefire in the Middle East, particularly between Israel and Hamas, acted as a counterbalance. Earlier in the week, the United States expressed optimism that negotiations could bridge the gaps between the two parties, potentially averting further escalation in the region.