Oil prices edge higher on US crude stockpiles draw

NEW YORK – Oil prices inched up on Thursday, bouncing back from two-week lows, after data showed falling crude and fuel inventories in the United States.

Brent crude futures settled at USD 74.45 a barrel, up 23 cents, or 0.31%. US West Texas Intermediate crude futures settled down 28 cents, or 0.4%, at USD 70.67 a barrel.

Both benchmarks had settled down on Wednesday, closing at their lowest levels since Oct. 2 for a second day in a row, after OPEC and the International Energy Agency cut demand forecasts for 2024 and 2025.

US crude inventories fell by 2.2 million barrels to 420.6 million barrels in the week ended Oct. 11, the Energy Information Administration said on Thursday, compared with analysts’ expectations in a Reuters poll for a 1.8 million-barrel rise. Gasoline and distillate inventories also fell last week.

“This tells me operational efficiencies are still improving,” said Tim Snyder, chief economist at Matador Economics. “Markets are normalizing.”

Oil output in North Dakota, the third-largest producing state in the US, fell by around 500,000 barrels through October, after wildfires crossed into key producing counties this month, a state regulator said.

The European Central Bank cut interest rates for the third time this year on Thursday, indicating that inflation in the euro zone is now increasingly under control and the economic outlook has worsened.

That decision is expected to boost oil prices as it makes borrowing cheaper, potentially boosting demand.

But fears that a retaliatory attack by Israel on Iran for the latter’s Oct. 1 missile strike could disrupt oil supplies kept prices steady, though uncertainty remains over how the conflict in the Middle East will develop.

“The country’s forthcoming retaliatory measures against Iran are still not clear,” said John Evans of oil broker PVM.

Evans added that the Middle East “will certainly provide enough reason to move oil prices again soon enough and investors today will also be preoccupied with an abundance of financial data.”

The dollar jumped to an 11-week high on Thursday, also offsetting some gains. A firmer US currency can hurt demand for dollar-denominated oil from buyers using other currencies.

Investors are also waiting for further details from China on broad plans announced on Oct. 12 to revive its ailing economy, including efforts to shore up the ailing property market.

(Reporting by Nicole Jao in New York, Paul Carsten and Ahmad Ghaddar in London and Florence Tan and Emily Chow; Editing by Mark Potter, Daren Butler, Jane Merriman. Will Dunham, and Susan Fenton)