Oil prices rose on Thursday, rebounding from three days of losses, on expectations the lower levels may prompt the U.S., the world’s biggest crude consumer, to start replenishing its strategic reserve, putting a floor under prices.
Still, prices fell more than 3% on Wednesday to a seven-week after the U.S. Federal Reserve kept interest rates steady, which may curtail economic growth this year and limit oil demand increases.
Crude was also pressured by an unexpected increase in U.S. crude inventories and signs of an impending Israel-Hamas ceasefire that would ease Middle East supply concerns. Brent crude futures for July gained 58 cents, or 0.7%, to $84.02 a barrel by 0633 GMT on Thursday. U.S. West Texas Intermediate (WTI) crude for June climbed 53 cents, or 0.7%, to $79.53 a barrel.
“The oil market was supported by speculation that if WTI falls below $79, the U.S. will move to build up its strategic reserves,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities. The U.S. has said it aims to replenish the Strategic Petroleum Reserve (SPR) after a historic sale from the emergency stockpile in 2022 and wants to buy back oil at $79 a barrel or less.
