Oil prices gain after unexpected decline in US crude oil inventory

9 May 2024 , 10:41 AM

Early on Thursday, oil prices increased on signs of a tighter supply due to declining US crude oil stocks and growing expectations that the Federal Reserve would lower interest rates before the year is out.

July Brent crude futures were up 23 cents to $83.81 per barrel. The price of a barrel of U.S. West Texas Intermediate crude increased by 29 cents to $79.28 in June.

According to the Energy Information Administration, crude stockpiles decreased by 1.4 million barrels last week to 459.5 million barrels. This was more than analysts’ predictions in a Reuters poll for a 1.1 million-barrel fall as refinery operations surged.

The EIA reported that rising gasoline supplies, which unexpectedly increased by almost 900,000 barrels in a single week to 228 million barrels, prevented prices from rising.

Growing anticipation that the US Federal Reserve will lower interest rates by year’s end following less positive-than-expected jobless figures in the US also drove up oil prices. Spending on crude oil may rise in response to lower interest rates.

Though the United States stated earlier this week that talks on a Gaza truce should be able to bridge the divides between Israel and Hamas, hopes for a Middle East ceasefire prevented oil prices from rising.

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