Oil prices rose on Wednesday on expectations for higher demand as the U.S. dollar weakened and a report showed U.S. crude and gasoline inventories fell while the release of inflation data may point to a more supportive economic outlook.
Brent crude futures were up 50 cents, or 0.6% at $82.88 a barrel. U.S. West Texas Intermediate crude futures (WTI) rose 52 cents, or 0.7%, to $78.54 a barrel by 0505 GMT. U.S. crude oil inventories fell 3.104 million barrels in the week ended May 10, according to market sources citing American Petroleum Institute’s figures on Tuesday.
Gasoline inventories fell by 1.269 million barrels, and distillates rose by 673,000 barrels. U.S. government inventory data is due later on Wednesday and are likely to also show a drop in crude stockpiles as refineries increase their runs meet increased fuel demand heading into the peak summer driving season.
“Expectations of another drawdown in U.S. oil inventories should support oil prices,” ANZ Research said in a note. U.S. Consumer Price Index (CPI) data is also due on Wednesday and should give a clearer indication whether the Federal Reserve may cut interest rates later this year, which could spur the economy and boost fuel demand.
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