Brent futures rose 58 cents, or 0.7%, to $85.66 a barrel, while U.S. WTI crude added 75 cents, or 0.9%, to $83.60
Oil prices added to gains from the previous session on Thursday, buoyed by a bigger-than-expected drop last week in crude stocks in the US, the world’s biggest oil consumer.
Brent futures rose 58 cents, or 0.7%, to $85.66 a barrel by 0630 GMT, while U.S. West Texas Intermediate (WTI) crude added 75 cents, or 0.9%, to $83.60.
Both contracts settled higher on Wednesday.
U.S. crude inventories dropped by 4.9 million barrels last week, the latest data from the U.S. Energy Information Administration (EIA) showed. That exceeds a decline of 30,000 barrels forecast by analysts in a Reuters poll and a decline of 4.4 million barrels in a report from the American Petroleum Institute (API).
Healthy demand signals from the U.S. outweigh concerns from modest Chinese growth last week, according to Priyanka Sachdeva, senior market analyst at Phillip Nova.
Hopes of a Fed easing, which can boost economic growth, and current summer travel in the U.S. are ensuring enough traction in oil demand from the world’s biggest economy, she added.
The prospects of cuts in interest rates in coming months in the both the U.S. and Europe helped to support the market.
Fed officials said on Wednesday the U.S. central bank is “closer” to reducing interest rates given inflation’s improved trajectory and a labour market in better balance, possibly setting the stage for a cut in borrowing costs in September.
Also, U.S. economic activity grew at a slight to modest pace from late May through early July with firms expecting slower growth ahead.
The ECB, meanwhile, is all but certain to keep interest rates unchanged on Thursday, but hinted that its next move is likely to be a cut.
