Global oil prices rebounded on Thursday, recovering from two consecutive sessions of decline, as investors reassessed the latest U.S. crude oil and gasoline inventories data and returned to buying mode.
Brent crude futures for May delivery gained 29 cents, or 0.34%, reaching $86.38 a barrel, while the more actively traded June contract rose 28 cents, or 0.33%, to $85.69 at 0041 GMT. The May contract is set to expire on Thursday. Similarly, U.S. West Texas Intermediate (WTI) crude futures for May delivery increased by 41 cents, or 0.50%, to $81.76 a barrel.
The rebound in oil prices followed a period of pressure in the previous session, triggered by unexpected increases in U.S. crude oil and gasoline inventories last week. This uptick was driven by a rise in crude imports and sluggish gasoline demand, as reported by the Energy Information Administration data. However, it’s worth noting that the build in crude stocks was smaller than projected by the American Petroleum Institute.
Commenting on the market dynamics, Bjarne Schieldrop, chief commodities analyst at SEB Research, mentioned, “We… expect US inventories to rise less than normal in reflection of a global oil market in a slight deficit. This will likely lend support to the Brent crude oil price going forward.”
In addition to inventory data, recent disappointing inflation figures have contributed to the market sentiment. They affirm the case for the U.S. Federal Reserve to maintain its current short-term interest rate target. While a Fed governor suggested the possibility of rate cuts later in the year, the prevailing expectation is for the central bank to hold off on immediate adjustments.
Looking ahead, market analysts at JPMorgan pointed out, “The market is converging on a June start to cuts for both the Fed and the European Central Bank,” noting that lower interest rates typically support oil demand. This anticipation of accommodative monetary policy measures could further influence oil price movements in the near term.