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Oil prices rose on Thursday after falling in the previous session, supported by a decline in crude and gasoline inventories in the United States after indications that the Federal Reserve (the US central bank) may keep interest rates high for a longer period, affecting expectations for future fuel demand.
By 0155 GMT, Brent crude futures for May settlement rose 0.6 percent, or 52 cents, to $86.47 a barrel, after falling 1.6 percent on Wednesday.
US West Texas Intermediate crude futures for May delivery also increased 0.5 percent, or 45 cents, to $81.72 a barrel, after falling 1.6 percent in the previous session. The April contract expired on Wednesday, down 2.1 percent at $81.68.
The US Energy Information Administration reported on Wednesday that crude inventories in the United States, the world’s largest oil consumer, fell for a second week. Inventories unexpectedly fell by two million barrels to 445 million barrels in the week ending March 15, compared to analysts’ expectations in a Reuters poll for an increase of 13 thousand barrels.
Inventories declined as exports rose and refineries continued to increase their activity. Gasoline stocks fell for the seventh week by 3.3 million barrels to 230.8 million, reflecting strong demand for fuel.
The inventory numbers gave some support to the market after mixed expectations from Federal Reserve policymakers regarding interest cuts this year weighed on prices earlier.
On Wednesday, the US Central Bank fixed interest rates in the range of 5.25 to 5.50 percent, but policymakers barely maintained their expectations for three rate cuts this year, which means that interest rates may remain high for a longer period.
Rates remaining high for a longer period could mean lower economic growth, which could affect future fuel demand.
