Brent crude futures settled at US$82.75 a barrel, up 15 cents, or 0.2%. West Texas Intermediate (WTI) US crude futures settled at US$78.62 a barrel, gaining 12 cents, or 0.2%. — Reuters
NEW YORK: Oil prices rose slightly on Thursday in up-and-down trade, supported by an Opec forecast for demand growth and as data showing an US easing labor market and slowing inflation which stoked hopes for Federal Reserve rate cuts despite recent comments form Fed officials.
Brent crude futures settled at US$82.75 a barrel, up 15 cents, or 0.2%. West Texas Intermediate (WTI) US crude futures settled at US$78.62 a barrel, gaining 12 cents, or 0.2%. Both benchmarks had gained nearly 1% in the previous session.
Fresh comments by the Organization of Petroleum Exporting Countries also helped boost crude prices.
The organisation expects demand to grow to 116 million barrels a day by 2045, and possibly higher, Opec Secretary General Hathaim Al Ghais said on Thursday in a rebuke of an International Energy Agency report predicting peak oil consumption by 2029.
Al Ghais, writing in Energy Aspects, called the IEA report "dangerous commentary, especially for consumers, and (that) will only lead to energy volatility on a potentially unprecedented scale."
The US Labor Department said the producer price index (PPI) for final demand dropped 0.2% on a month-to-month basis in May. Economists polled by Reuters had forecast a 0.1% increase. Separate data showed weekly initial jobless claims exceeded estimates to reach a 10-month high.
On Wednesday, the Fed held interest rates steady and pushed out the projected start of policy easing to as late as December. In a press conference after the end of the US central bank's two-day policy meeting, Fed chair Jerome Powell said inflation had fallen without a major blow to the economy.
Powell's comments "implying no definitive time frame for a rate reduction appeared to place additional pressure on the energy complex," said Jim Ritterbusch of Ritterbusch and Associates.
Higher borrowing costs tend to dampen economic growth and can limit oil demand.
Tomorrow, investors will turn their sights to the University of Michigan's Consumer Sentiment Index for signs of US economic strength or weakness.
"Last month, the number came in much weaker than anticipated, with the surprise print spawning volatility in the oil patch as traders viewed the lame number as a negative demand indicator," said Bob Yawger, director of energy futures at Muzuho.
On the supply side, US crude stockpiles rose more than expected last week, driven largely by a jump in imports, while fuel inventories also increased more than expected, data from the Energy Information Administration showed on Wednesday.
Oil traders are also watching continuing talks over a potential ceasefire in Gaza, which could ease fears of oil supply disruptions in the region.
In the latest attack on shipping, Iran-allied Houthi militants on Wednesday took responsibility for small watercraft and missile attacks that left a Greek-owned coal carrier in need of rescue near Yemen's Red Sea port of Hodeidah. — Reuters
