Oil prices rose on Thursday, clawing back some of the previous day’s losses, supported by fuel demand data from the United States, the world’s top oil consumer.
U.S. crude futures gained 48 cents, up 0.7%, to $73.04. Brent crude rose 52 cents, or 0.7%, to $76.93 a barrel. Both contracts were on track for their first weekly percentage gain in four.
A sharper than expected drop in U.S. gasoline inventories boosted prices, reflecting stronger demand for transport fuels.
U.S. gasoline inventories fell by 3.2 million barrels last week, more than the 1.2 million barrel draw forecast by analysts, data from the U.S. Energy Information Administration showed.
Distillate stocks also declined while U.S. jet fuel demand rose to its highest since December 2019.
Meanwhile, investors are also awaiting news from talks on raising the U.S. government’s $31.4 trillion debt ceiling, which kicked off on Wednesday, with Republicans continuing to insist on spending cuts.
The standoff sent the cost of insuring exposure to U.S. government debt to record highs as Wall Street grows more concerned about the risk of an unprecedented default.
“Once a compromise is reached… investors will be encouraged to act and stocks will probably rally, providing invaluable support for oil,” said PVM analyst Tamas Varga.
On Wednesday U.S. data showed a key inflation measure monitored by the Federal Reserve eased somewhat, potentially providing cover for the central bank to pause further increases to interest rates next month. Higher rates can weigh on oil demand.
(Reporting by Shadia Nasralla Additional reporting by Jeslyn Lerh in Singapore Editing by David Goodman)