Oil is rising thanks to strong fuel demand data

Oil prices rose in early Asian trading on Thursday after the impact of strong fuel demand in the United States outweighed fears that the world’s largest oil producer and consumer might default on its debt.

And by 0015 GMT, Brent crude futures rose 26 cents, or 0.34 percent, to $ 76.67 a barrel. US crude futures rose 28 cents to $72.84.

The latest US data showed that consumer prices rose in April, which increases the possibility that the Federal Reserve will maintain high interest rates, which may lead to a reduction in demand for oil. Rising global interest rates have weighed on oil prices in recent months, with traders worried about a recession.

However, signs of strength in fuel demand emerged in the US.

US gasoline inventories fell by 3.2 million barrels last week, much more than the 1.2 million barrels expected by analysts. Data from the US Energy Information Administration on Wednesday also showed a drop in distillate inventories.

Demand for jet fuel in the United States rose to the highest level since December 2019.

Meanwhile, detailed talks began regarding raising the US government’s debt ceiling of $31.4 trillion, with Republicans sticking to their insistence on spending cuts.

The standoff has spooked investors, as Wall Street worries about the risk of an unprecedented debt default.