Oil Prices Rebound Following Seven-Week Low Close

Oil prices rebounded on Thursday after three consecutive days of losses that brought prices to their lowest levels since mid-March.

Brent crude futures for July rose by 79 cents, or 0.95%, to reach $84.23 a barrel by 0959 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude for June climbed by 69 cents, or 0.87%, reaching $79.69.

The previous day, prices experienced a more than 3% decline to hit a seven-week low following the decision by the U.S. Federal Reserve to keep interest rates unchanged. The Fed also cautioned about persistent inflation, which could hamper economic growth and limit the increase in oil demand.

Additionally, crude prices faced pressure from an unexpected rise in U.S. crude inventories, as reported by the Energy Information Administration (EIA). Inventories reached their highest levels since June, increasing by 7.3 million barrels to 460.9 million barrels for the week ending April 26, contrary to analysts’ expectations of a 1.1 million barrel draw in a Reuters poll.

The rebound in prices was supported by ceasefire negotiations in the Israel-Hamas conflict and the possibility of low prices prompting U.S. government purchases for strategic reserves.

In the Middle East, there were growing expectations of a ceasefire agreement between Israel and Hamas following renewed efforts led by Egypt. However, Israeli Prime Minister Benjamin Netanyahu remained committed to a promised assault on the southern Gaza city of Rafah.

The U.S. has expressed its intention to replenish the Strategic Petroleum Reserve (SPR) after a historic sale from the emergency stockpile in 2022, aiming to buy back oil at $79 a barrel or lower.