Oil prices rose last week on a bigger-than-expected drop in crude inventories in the United States, the world’s largest oil consumer.
Brent futures rose 58 cents, or 0.7%, to $85.66 a barrel by 0630 GMT, while WTI crude rose 75 cents, or 0.9%, to $83.60.
Both contracts closed higher on Wednesday.
U.S. crude inventories fell by 4.9 million barrels last week, according to the latest data from the U.S. Energy Information Administration (EIA). That beat analysts’ estimates of a 30,000-barrel drop and the 4.4 million-barrel drop forecast by the American Petroleum Institute (API).
Signals of healthy demand from the U.S. outweigh concerns about modest growth in China last week.
Hopes of Fed easing that could boost economic growth and the current summer travel in the United States are providing a welcome boost to oil demand from the world’s largest economy.
Expectations of interest rate cuts in the United States and Europe in the coming months are helping to support the market.
Fed officials said on Wednesday that the U.S. central bank is closer to cutting interest rates given improving inflation and a better-balanced labor market.
U.S. economic activity also expanded slowly from late May to early July, and firms expect slower growth ahead.
The European Central Bank (ECB), meanwhile, is almost certain to keep interest rates unchanged on Thursday but signaled that its next move is likely to be a cut.
Investors are also awaiting policy news from a key leadership meeting in China that ends on Thursday.
The dollar fell for a third straight session on Thursday. A weaker dollar could boost oil demand by making commodities like oil cheaper for holders of other currencies.
