Oil edged higher in a choppy session as traders weighed the outlook for central bank interest rates against positive signs from the world’s biggest economy.
US data on Thursday showed a resilient economy and labor market, indicating potentially strong demand for crude oil. But the reports also raise the likelihood that the Federal Reserve will continue to raise interest rates. Fed Chairman Jerome Powell has added to the price glut by saying at least two interest rate hikes are likely to be needed this year to keep inflation down.
Benchmark US crude is on track for its first consecutive quarterly decline since 2019 due to China’s weak economic recovery and aggressive monetary tightening by the Federal Reserve. Supply has also been plentiful, bolstered by resilient exports from Russia, despite sanctions.
US crude inventories fell by 9.6 million barrels last week, the biggest draw in more than a month, according to the Energy Information Administration. Average demand for gasoline over a four-week period rose to the highest since 2021.
Prices:
- WTI for August delivery rose 30 cents to settle at $69.86 a barrel in New York.
- Brent for August settlement rose 31 cents to $74.34 a barrel.
