NEW YORK: Crude prices edged up on Wednesday from a two-month low in the prior session as the market balanced somewhat bullish US economic and storage data against a forecast for weaker global oil demand growth from the International Energy Agency (IEA).
Brent futures rose 33 cents, or 0.4%, to $82.71 a barrel by 12:10 p.m. EDT (1610 GMT), while US West Texas Intermediate (WTI) crude rose 43 cents, or 0.6%, to $78.45.
Earlier in the session, the bearish IEA report helped push both crude benchmarks into technically oversold territory with prices at their lowest levels since February.
That futures price drop came before some bullish US news on a bigger-than-expected weekly crude storage withdrawal and inflation data supporting analysts’ expectations that the US Federal Reserve will cut interest rates later this year.
The US Energy Information Administration (EIA) said energy firms pulled a more-than-expected 2.5 million barrels of crude from stockpiles during the week ended May 10.
That compares with the 0.5-million barrel withdrawal analysts forecast in a Reuters poll, and the 3.1-million barrel decline shown in data from the American Petroleum Institute (API), an industry group.
“The crude oil draw is mostly from the increase in the refinery utilization rate ... Refiners finally got serious about that, finally cranked it up a bit,” Bob Yawger, director of energy futures at Mizuho told Reuters.
US consumer prices increased less than expected in April, suggesting inflation resumed its downward trend at the start of the second quarter in a boost to financial market expectations that the Fed will cut interest rates in September.
Those expectations were further bolstered by other US data showing retail sales were unexpectedly flat last month as inflation-weary consumers cut back spending at online retailers and auto dealerships. Lower interest rates would reduce borrowing costs for businesses and consumers and could spur economic growth and demand for oil.
With the Fed still expected to cut interest rates later this year, the US dollar fell to a five-week low against a basket of other currencies.
A weaker dollar can boost global demand for oil by making the fuel less expensive in other countries.