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Oil prices rise on positive US demand outlook

AA / Ankara / Zeynep Beyza Kilic

Oil prices rose in morning trade on Thursday, supported by rising demand in the U.S., the world’s biggest oil consumer, and easing concerns about rising U.S. inflation.

International benchmark Brent crude was trading at $83.03 per barrel at 10:57 local time, up 0.34% from Wednesday’s close, which ended today at $82.75 per barrel.

Benchmark US West Texas Intermediate (WTI), meanwhile, traded at $78.93 a barrel, up 0.38% from Wednesday’s price of $78.63.

US commercial crude oil inventories fell by 2.5 million barrels to 457 million barrels in the week to May 10, according to data released by the Energy Information Administration (EIA) on Wednesday.

The EIA data showed a drop that was well above market forecasts of about 400,000 barrels, indicating increased demand, which naturally helps oil prices rise.

In the same period, gasoline stocks decreased by approximately 200,000 barrels to 227.8 million barrels.

The latest US Consumer Price Index (CPI) data rose 0.3% month-on-month in April, below market forecasts.

As a result, market analysts believe that the lower-than-expected rise in consumer prices in April points to a slowdown in inflation at the start of the second quarter, while supporting the prospect of interest rate cuts in September.

In another development, China, the world’s biggest oil importer, announced plans this week to issue 1 trillion yuan (more than $138 billion) worth of subsidized bonds. According to the statement of the Ministry of Finance, the bonds will be used to accelerate the slow development of the economy, which, if successful, will lead to an increase in demand for oil and an increase in prices.

In addition, concerns that wildfires in Canada could cause supply disruptions as they move closer to the country’s major oil production centers pushed crude oil higher.

A forest fire that broke out in western Canada over the weekend continues to grow, affecting tens of thousands of hectares of forest and causing the evacuation of thousands of people.

* Translated from English by Munir Benuri.

Source: AA

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