TOKYO- Oil prices rose on Thursday, recovering some of the previous day’s loss, on hopes of potential US interest rate cuts boosting economic activity and fuel demand, though lingering concerns over slower global demand capped gains.
Brent crude futures climbed 17 cents, or 0.2 percent , to $79.93 a barrel. US West Texas Intermediate crude increased by 23 cents, or 0.3 percent , to $77.21 per barrel.
Both benchmarks fell more than 1 percent on Wednesday after US crude inventories rose unexpectedly and on easing worries about a wider Middle East conflict.
US consumer prices rose moderately in July and the annual increase in inflation slowed to below 3 percent for the first time in nearly 3-1/2 years, reinforcing expectations the Federal Reserve will cut interest rates next month.
“We saw a correction in Asia trade as the oil market was oversold on Wednesday,” said Yuki Takashima, economist at Nomura Securities, adding that investors are betting the Fed could start cutting rates next month.
“Still, oil prices are expected to stay under pressure going forward as concerns persist that global demand, especially in China, will be sluggish,” Takashima said, predicting WTI will head towards the $72 mark in early August.
US crude oil stockpiles rose by 1.4 million barrels in the week ended Aug. 9, compared with estimates for a 2.2 million barrel draw, building for the first time since late June, Energy Information Administration (EIA) data showed on Wednesday.
