NEW YORK :Oil prices edged up on Thursday as U.S. inflation data boosted expectations of a Federal Reserve interest rate cut while the International Energy Agency slightly lifted its oil demand outlook for next year while still forecasting ample supply.
Brent crude futures were up 24 cents, or 0.33 per cent, at $73.76 a barrel by 1:30 p.m. EST (1830 GMT). U.S. West Texas Intermediate crude futures were up 12 cents, or 0.17 per cent, at $70.41.
The IEA made a slight upward revision to its demand outlook for next year but still expected the oil market to be comfortably supplied. On Wednesday, OPEC cut its demand growth forecast for 2024 for the fifth straight month.
“If you look at the actual data, the IEA is saying that the glut they predicted should be happening right this minute,” said Phil Flynn, analyst at Price Futures Group. Global oil inventories fell by 39.3 million barrels in October as low refinery activity coincided with a rise in global oil demand, data from IEA showed.
In the U.S., inflation rose slightly in November, in line with economists’ expectations. Investors broadly expect the Fed to cut rates again, feeding optimism about economic growth and energy demand.
“The inflation report creates a lot of comfort. It could have been better, but it seems to be low enough for the Fed to reduce rates at the next meeting,” said Bjarne Schieldrop, chief commodities analyst at SEB.
In the world’s top oil consumer, the U.S., gasoline and distillate inventories rose by more than expected last week, Energy Information Administration data showed.
Global oil demand rose at a slower than expected rate this month but has remained resilient, JPMorgan analysts said in a note on Thursday.
Chinese crude imports also grew annually for the first time in seven months in November, up more than 14 per cent from a year earlier.