TOKYO: Oil prices extended gains from the previous session on Thursday on signs of stronger demand in the U.S. where data showed slower inflation than markets expected, strengthening the argument for an interest rate cut which could result in even stronger demand.
Brent futures rose 42 cents, or 0.5 per cent, to US$83.17 a barrel, while U.S. West Texas Intermediate crude (WTI) gained 43 cents, or 0.6 per cent, to US$79.06 at 0032 GMT.
U.S. consumer prices rose less than expected in April in a boost to financial market expectations for a September rate cut by the Federal Reserve, which could temper dollar strength and make oil more affordable for holders of other currencies.
U.S. crude oil, gasoline and distillate inventories fell, reflecting a rise in both refining activity and fuel demand, showed data from the Energy Information Administration (EIA).
Crude inventories fell 2.5 million barrels to 457 million barrels in the week ended May 10, the EIA said, versus the 543,000 barrel consensus analyst forecast in a Reuters poll.
Signs of slowing inflation and stronger demand were supporting prices, ANZ Research said in a client note, as is geopolitical risk which it said remains elevated.
In the Middle East, Israeli troops battled Hamas militants across Gaza, including Rafah which had been a civilian refuge.
Ceasefire talks mediated by Qatar and Egypt are at a stalemate, with Hamas demanding an end to attacks and Israel refusing until the group is annihilated.
Gains were constrained after the IEA trimmed its forecast for 2024 oil demand growth, widening the gap between its view and that of producer group OPEC.
Global oil demand this year will grow by 1.1 million barrels per day (bpd), IEA said, down 140,000 bpd from its previous forecast, largely due to weak demand in developed nations of the Organisation for Economic Co-operation and Development. - Reuters