Investing.com– Oil prices edged higher Thursday, extending recent gains on signs of cooling U.S. inflation as well as a fall in U.S. inventories.
At 09:10 ET (13:10 GMT), Brent Oil Futures rose 0.3% to $85.37 a barrel, while West Texas Intermediate crude futures rose 0.4% to $82.42 a barrel.
US CPI slowed in June
Data released earlier Thursday showed that U.S. inflation slowed to 3.0% in June on an annual basis, while the monthly figure actually fell 0.1%.
These figures pointing to a cooling of pricing pressures, adding to the expectation that the Federal Reserve might start a rate-cutting cycle in September.
Federal Reserve Chair Jerome Powell, in speaking to Congress earlier this week, flagged that the U.S. economy was still headed for a soft landing.
Powell also said that the Fed did not need to wait for inflation to fall below its 2% target to begin trimming rates. His comments dented the dollar, which helped the crude market by making oil cheaper for international buyers.
US crude inventories fall
The market had also received support from data released Wednesday showing U.S. oil inventories unexpectedly shrank in the week to July 5, amid increased demand due to summer holiday travel.
But doubts persisted over just how strong U.S. demand was, especially as distillates inventories unexpectedly grew during the week.
Still, traders were positioning for tighter U.S. markets in the coming weeks, with summer travel set to continue, while hurricane Beryl was also seen causing some disruptions in oil production in the Gulf of Mexico.
IEA report points to slowing demand growth
Stemming gains was the forecast from the International Energy Agency (IEA) that global oil demand growth will slow to just under a million barrels per day this year and next, as Chinese consumption contracted in the second quarter due to economic problems.
Global demand in the second quarter rose by 710,000 barrels a dat year on year in its lowest quarterly increase in over a year, the IEA, which advises industrialised countries, said in its monthly oil report.
The Organization of Petroleum Exporting Countries maintained its forecast for relatively strong global oil demand growth in 2024 and 2025, in its report released Wednesday, stating that resilience in the global economy and resurgent air travel will underpin demand.
(Ambar Warrick contributed to this article.)
This post is originally published on INVESTING.
