Oil prices increased on Thursday, supported by an estimated decline in US gasoline inventories, signaling greater demand in the country despite the rise in crude oil stocks.
International benchmark Brent traded at $84 a barrel at 1005 GMT for a 0.98% rise after trade in the previous session ended at $83.18 a barrel.
American benchmark West Texas Intermediate (WTI) traded at $81.17 per barrel at the same time for a 0.90% increase from $80.44 a barrel at the end of the previous trading session.
The price increases came after a forecast of a decline in US gasoline inventories, indicating a recovery in demand to ease investor concerns and support higher prices.
Late Wednesday, the American Petroleum Institute (API) announced its estimate of a fall of 4.6 million barrels in US gasoline inventories. The API also forecast that the country’s crude oil inventories would increase by 5.2 million barrels, lagging behind the market expectation of a rise of 140,000 barrels.
The US Energy Information Administration (EIA) will release official oil stock data later on Thursday. Oil prices are forecast to continue rising if the EIA signals a drop in stocks.
Oil prices also found support from the EIA forecast in its Winter Fuels Outlook released on Wednesday, which said that production in the country would decrease to 11 million barrels per day (bpd) in 2021 and increase to 11.7 million bpd in 2022, as tight oil production rises in the US.
“Growth will come as a result of operators increasing rig counts, which we expect will offset production decline rates,” the EIA said.
Prices were also boosted because electric power generators, especially in Asia and Europe, were prompted to switch from costly natural gas to cheaper oil to decrease fuel costs, causing a rise in crude demand.