Brent futures added 32 cents, or 0.4%, to $83.07 a barrel, while U.S. WTI advanced 31 cents, or 0.4%, to $78.94
Oil prices extended gains from the previous session on Thursday on indications of stronger demand in the U.S., where numbers showed slower inflation than markets anticipated, bolstering the case for an interest rate reduction that could drive greater consumption.
Brent futures added 32 cents, or 0.4%, to $83.07 a barrel at 0620 GMT, while U.S. WTI advanced 31 cents, or 0.4%, to $78.94.
A more tamed read for U.S. April inflation and a far weaker-than-expected read in U.S. retail sales seem to offer room for the Federal Reserve to consider earlier rate cuts, with market expectations leaning more firmly for policy easing to kickstart in September this year, according to IG market strategist Yeap Jun Rong.
He said: The larger-than-expected drawdown in U.S. crude inventories for last week also offered some calm, while geopolitical tensions continue to rock on in the Middle East.
U.S. consumer prices increased less than expected in April in a boost to financial market expectations for a September rate cut by the Fed, which could temper dollar strength and make oil more affordable for other currency holders.
Elsewhere, U.S. crude oil, gasoline and distillate inventories dropped, reflecting an increase in both refining activity and fuel demand, as per data from the EIA.
Crude inventories declined 2.5 million barrels to 457 million barrels in the week ended May 10, as per the EIA.
Signs of slowing inflation and stronger demand were supporting prices, ANZ Research also said in a client note, as is geopolitical risk, which it noted remains higher.
Gains were constrained after the IEA cut its forecast for 2024 oil demand growth, widening the gap between its view and that of OPEC.
Global oil demand this year will increase by 1.1 million bpd, the IEA said, down 140,000 bpd from its previous forecast, largely because of weak demand in developed nations of the OECD.
