Oil prices rose in Asian trading on Thursday, extending earlier gains, on hopes of a larger-than-expected weekly draw in U.S. crude inventories and rising demand after the U.S. Federal Reserve signaled borrowing costs would fall in 2024.
Brent futures rose 23 cents, or 0.31%, to settle at $74.49 a barrel by 03:45 GMT. West Texas Intermediate (WTI) crude rose 11 cents, or 0.16%, to settle at $69.58 a barrel.
Markets rose in the previous session on concerns about the security of Middle East oil supplies following the tanker attack in the Red Sea. Crude oil prices rebounded before the Fed meeting, and the event lifted them further.
Low interest rates generally reduce consumer borrowing costs, which can increase economic growth and oil demand. The dollar has fallen for three consecutive sessions, falling to a four-month low, making oil cheaper for foreign buyers and supporting demand. While demand supported the price, it was also supported by the larger-than-expected decline in US crude oil inventory.
The U.S. Energy Information Administration (EIA) said energy companies pulled 4.3 million barrels of crude oil from inventories in the week ending Dec. 8, more than expected, as imports fell.
After the Organization of the Petroleum Exporting Countries (OPEC) stated in its last monthly report published last night that the recent decline in crude oil prices was due to exaggerated concerns about oil demand growth, the disappearance of concerns about demand growth also revived the market.
Brent futures have fallen nearly 10% since OPEC+ announced a new round of production cuts on November 30. However, some analysts have warned about rising fuel inventories in the United States, saying this indicates reduced winter demand and that this is limiting the market’s overall rise. Increasing gasoline and distillate stocks is also not a good sign.
