Market Analysis

Oil prices rose in early trading on Thursday as declining U.S. crude oil inventories led to supply shortages and growing expectations that the Federal Reserve would cut interest rates by the end of the year. 

July Brent crude futures rose 23 cents to $83.81 a barrel by 2033 GMT. The price of West Texas Intermediate crude oil rose 29 cents in June to $79.28 per barrel. Crude oil inventories fell 1.4 million barrels last week to 459.5 million barrels, according to the Energy Information Administration, while analysts in a Reuters poll expected a decline of 1.1 million barrels as refinery activity picks up. 

Price increases were curbed by gasoline inventories unexpectedly rising by more than 900,000 barrels in a week to 228 million barrels, according to the EIA. Increasing expectations that the U.S. central bank will cut interest rates by the end of the year due to weaker-than-expected U.S. employment data also helped boost oil prices. 

Lower interest rates may increase the cost of crude oil. But gains in oil prices are being held back by hopes for a ceasefire in the Middle East, with the United States saying earlier this week that ceasefire talks in the Gaza Strip would help bridge the gap between Israel and Hamas talks.

Paraphrasing text from "Reuters" all rights reserved by the original author.