Oil prices experienced a rise in early Asian trade on Thursday following the release of U.S. inflation and economic data, which fueled optimism that the Federal Reserve may opt for fewer interest rate hikes in the world’s largest economy.
Brent crude futures saw a marginal increase of 6 cents, reaching $80.17 per barrel by 0004 GMT, while U.S. West Texas Intermediate crude futures rose by 4 cents to $75.79.
Recent U.S. data revealed that consumer prices had a modest growth in June, marking the smallest annual increase in over two years. While the market expects one more interest rate hike, oil traders are hopeful that this might be the extent of it, as higher rates have the potential to slow economic growth and diminish oil demand.
In a significant move, Saudi Arabia, the top oil producer, pledged last week to extend its production cut of 1 million barrels per day (bpd) into August. Additionally, Russia plans to reduce its exports by 500,000 bpd.
However, the price gains may face a limitation due to a report from the U.S. Energy Information Administration, which indicated a much larger-than-anticipated increase of nearly 6 million barrels in U.S. crude stockpiles last week.
Meanwhile, gasoline inventories remained relatively stable at 219.5 million barrels during the Fourth of July holiday week, a situation that, according to Phil Flynn, an analyst at Price Futures Group, is “almost unheard of.”
Analysts had predicted a substantial decline in gasoline stocks as more drivers hit the road for holiday travel.
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