Oil prices see rebound amid falling US crude inventories, better interest rate cut prospects


(MENAFN) Oil prices saw a rebound in early trading on Wednesday after three days of declines, driven by a report indicating a reduction in U.S. crude and fuel inventories last week. This suggested steady demand and bolstered expectations for interest rate cuts. brent crude futures increased by 21 cents to USD84.87 per barrel by 0055 GMT, following a 1.3 percent drop in the previous session. Similarly, U.S. West Texas Intermediate (WTI) crude rose 26 cents to USD81.67 per barrel after a 1.1 percent decline in the previous session.

WTI crude experienced a 3 percent decrease over the past three sessions due to concerns about weak global oil demand and the Texas energy industry's resilience following Hurricane Beryl's impact on Monday. During the same period, Brent crude fell by 3.2 percent. However, the latest data from the American Petroleum Institute showed that U.S. crude and gasoline inventories fell last week, while distillate stocks rose, suggesting that summer fuel demand remains steady, contributing to the oil price rebound.

Specifically, crude inventories decreased by 1.923 million barrels for the week ending July 5, and gasoline inventories dropped by 2.954 million barrels, whereas distillate inventories increased by 2.342 million barrels. Additionally, comments from Federal Reserve Chairman Jerome Powell indicated that the likelihood of interest rate cuts had strengthened, supporting the oil market. Lower interest rates are expected to stimulate economic growth and, consequently, increase oil consumption. Following Powell's remarks, investors continued to anticipate about a 70 percent chance of a rate cut by the U.S. central bank in September, further bolstering oil prices. 

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