Oil prices continued their upward trajectory for a second consecutive day, driven by indications of increasing demand and a positive sentiment across global markets.
Brent crude, the global benchmark, approached $86 per barrel following a 0.5% rise on Wednesday, while West Texas Intermediate (WTI) hovered near $83. The rally was supported by a significant drop of 3.4 million barrels in US crude inventories last week, accompanied by rising consumption of jet fuel and gasoline as the summer travel season remains in full swing.
The surge in oil prices coincided with a broader rally in global equities, particularly in the US where stock markets reached new highs. Investors eagerly awaited inflation data due later on Thursday, which could influence expectations of Federal Reserve interest-rate cuts by year-end.
Throughout the year, oil prices have seen upward momentum, bolstered by production cuts implemented by OPEC+ nations. Despite occasional oversupply concerns from certain cartel members exceeding agreed output limits, notable reductions by key producer Russia in June have helped stabilize prices.
Market indicators such as timespreads reflect underlying strength, with the prompt spread between the closest Brent contracts standing at 89 cents per barrel in a bullish backwardated structure. This represents a notable increase from 38 cents observed a month earlier, indicating tightening market conditions.
Investors are now focused on the International Energy Agency’s upcoming monthly report, expected later on Thursday, for insights into global crude oil balances for the first half of the year.
