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Oil futures were up modestly early Thursday, attempting to put together back-to-back gains as investors await official data on U.S. crude inventories, with bulls encouraged by expectations the Federal Reserve interest rate-hike cycle is nearing its end.
Price action
-
West Texas Intermediate crude for August delivery
CL00,
+0.62% CLQ23,
+0.59%
was up 23 cents, or 0.3%, at $75.89 a barrel on the New York Mercantile Exchange. -
September Brent crude
BRN00,
+0.82% BRNU23,
+0.82% ,
the global benchmark, rose 40 cents, or 0.5%, to $80.03 a barrel on ICE Futures Europe. -
Back on Nymex, August gasoline
RBQ23,
+0.32%
fell 0.2% to $2.69 a gallon, while August heating oil
HOQ23,
+1.50%
was up 0.8% at $2.616 a gallon. -
August natural gas
NGQ23,
-1.41%
declined 0.5% to $2.605 per million British thermal units,
Market drivers
“Oil has reacted positively to the expectation that we are approaching the end of the hiking cycle,” said Warren Patterson and Ewa Manthey, commodities strategists at ING, in a note.
With supplies expected to tighten in the second half of the year, it’s only a matter of time until Brent moves solidly above $80 a barrel, they said.
“How convincing this move will be will really depend on whether we see a big shift in speculative sentiment. Whilst we have seen an increase in speculative buying in recent weeks, historically it is still fairly modest, particularly when you consider the tightening that is expected in the physical market,” they said.
The American Petroleum Institute late Tuesday said U.S. crude inventories fell by 798,000 barrels last week, according to news reports, while gasoline stocks declined by 2.8 million barrels.
Official data from the Energy Information Administration is due Wednesday morning. Analysts surveyed by S&P Global Commodity Insights, on average, expect crude inventories to show a fall of 2.25 million barrels last week, with gasoline stocks down 900,000 barrels and distillate inventories flat.
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