LONDON, June 29 (Reuters) – Oil prices rose slightly higher on Thursday, buoyed by a larger-than-expected fall in US inventories, but fears that rising interest rates could hurt global economic growth limited further gains.
Brent crude oil futures were up 43 cents, or 0.6%, to $74.46 a barrel by 1358 GMT. US West Texas Intermediate (WTI) crude oil futures rose 48 cents, or 0.7%, to $70.04 a barrel.
Both benchmarks gained about 3% on Wednesday after the U.S. Energy Information Administration (EIA) said crude inventories fell 9.6 million barrels in the week ending June 23, far more than the 1.8 million barrels analysts had predicted. predicted in a Reuters poll.
“The jury is still out on whether the second part of 2023 will bring the long-awaited fall in inventories. Nevertheless, the impact stocks have on oil prices was seen yesterday on a smaller scale,” said PVM Oil analyst Tamas. Varga. said.
However, concerns about the impact of rising interest rates on economic growth came to the fore again, jeopardizing further gains.
Leaders of the world’s top central banks reaffirmed on Wednesday that they believe further policy tightening will be necessary to curb stubbornly high inflation, but still believe they can do so without triggering outright recessions.
US Federal Reserve Chairman Jerome Powell did not rule out further hikes at the next central bank meeting, while European Central Bank President Christine Lagarde raised expectations for a ninth consecutive rise in interest rates in the US. euro zone in July.
Annual profits for industrial companies in China, the world’s second largest oil consumer, added to the pressure, dropping double-digits in the first five months as declining demand squeezed margins.
“The lack of prospects for fuel demand growth has limited the rise in oil prices, even with supply restrictions by oil producers,” said Tetsu Emori, CEO of Emori Fund Management Inc.
Faced with falling prices, Saudi Arabia pledged this month to cut production sharply in July, contributing to a broader OPEC+ deal to limit supply until 2024.
Brent’s six-month backwardation reached its lowest level since December, but still pointed to higher demand for immediate delivery.
Additional reporting by Yuka Obayashi; edited by Jason Neely and David Evans