(Bloomberg) -- Oil climbed for a second day as a decline in U.S. crude inventories countered the IEA’s call that demand growth is slowing.
Global crude benchmark Brent advanced above US$85 a barrel after posting a 0.5 per cent gain on Wednesday. Global oil demand growth will be less than 1 million barrels a day this year, the International Energy Agency said, adding that China’s post-Covid rebound has run its course.
The agency’s bearish tone came after data on Wednesday showed nationwide U.S. stockpiles fell by 3.4 million barrels last week, with gauges of jet fuel and gasoline consumption both rising as the summer travel season continues.
Oil’s push higher came as global equities rallied, with U.S. shares at a new high ahead of inflation data later Thursday that may fan investors’ expectations for interest-rate cuts from the U.S. Federal Reserve.
Crude has rallied this year, supported by OPEC+ supply cutbacks, although relatively muted moves have caused volatility to decline to multi-year lows this month. While some members of the cartel are continuing to pump above agreed limits, key producer Russia made noticeable reductions in June.
“The big event for oil is, like other markets, the U.S. CPI that could pave the way for a September cut supporting USD-denominated commodities like oil,” said Arne Lohmann Rasmussen, Head of Research at A/S Global Risk Management. “The IEA report today indicates that demand might not be as strong as some believe here in Q3.”
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