NEW YORK: Oil prices rose slightly on Thursday in up-and-down trade, pressured by rising U.S. crude and fuel supplies and expectations of a delayed start to Federal Reserve interest rate cuts but supported by U.S. economic data showing an easing labor market and slowing inflation.
Brent crude futures were up 31 cents, or 0.4%, to $82.91 a barrel by 1:12 p.m. EDT (1712 GMT). West Texas Intermediate (WTI) U.S. crude futures rose 25 cents, or 0.3%, to $78.75. 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 organization 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 U.S. Labor Department, meanwhile, said the producer price index (PPI) for final demand dropped 0.2% on a month-to-month basis in May.
Oil little changed as surprise crude stock build caps gains
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 U.S. 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.
On the supply side, U.S. 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 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.
The group has attacked international shipping in the Red Sea region since November in solidarity with the Palestinians in the war between Israel and Hamas.
U.S. Secretary of State Antony Blinken said the Palestinian group had proposed numerous changes to a U.S.-backed proposal for a ceasefire, adding that mediators were determined to close gaps in the negotiations.
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