By Adedapom Adesanya
Crude oil prices climbed higher on Thursday after the US Energy Information Administration (EIA) reported a draw on crude oil and data showing a cooling jobs market.
Brent crude futures settled at $85.71 per barrel during the session after going up by 64 cents or 0.75 per cent as the US West Texas Intermediate (WTI) futures closed at $82.17 a barrel after gaining 60 cents or 0.74 per cent.
The EIA reported an inventory decline of 2.5 million barrels for the week to June 14 compared with an inventory build of 2.7 million barrels for the previous week, which pressured prices.
In fuels, the EIA estimated inventory draws for the week to June 14 while gasoline stocks shed 2.3 million barrels in the week, signalling a strong start to summer driving season that would inevitably affect oil market sentiment.
Prices have been on an upward trajectory this week after the latest Ukrainian drone attack on a Russian terminal that caused a fire and after the foreign minister of Israel said the country was nearing an all-out war with Hezbollah.
Also, expectations of rate cuts in the US triggered higher prices as lower rates are supposed to boost demand for commodities including oil.
With oil output expected to increase, a rate decrease in the US would make borrowing more affordable in the biggest economy in the world.
These expectations got a fresh boost on Thursday on signs of cooling of the US jobs market after the latest weekly jobless claims report showed a decline.
The number of Americans filing new claims for unemployment benefits fell last week and increased hopes that the US Federal Reserve could cut interest rates soon.
Last week, the US Federal Reserve left interest rates unchanged, indicating that there will be one cut in 2024, with more cuts following the next year and beyond. Just before the US central bank announcement, its inflation data showed a notable slowdown in consumer price increases for May, indicating that inflation is cooling.
On Thursday, the Bank of England (BoE) announced it would keep its key interest rate unchanged at a 16-year-high of 5.25 per cent. The BoE meeting was its last ahead of the UK elections on July 4.
Market analysts noted that prices are also likely to remain supported by a growing geopolitical risk premium driven by conflict in the Middle East as Israeli forces attacked areas in the central Gaza Strip overnight, while tanks deepened their advance into Rafah in the south.
Dipo Olowookere