Brent crude oil prices held above $87 a barrel after the previous day’s data showed a decline in US inventories, according to Reuters.
Brent crude futures fell 29 cents, or 0.3%, to $87.05 per barrel. US West Texas Intermediate (WTI) crude futures fell 40 cents, or 0.5%, to $83.48. Trading volume declined due to the US Independence Day holiday.
Brent rose 1.3% in the previous session to settle at $87.34, its highest close since 30 April. WTI, meanwhile, settled at an 11-week high of $83.88.
The increase followed a larger-than-expected decline in US oil inventories. The US Energy Information Administration (EIA) reported a 12.2 million drop in inventories, whereas analysts expected a decline of 680,000 barrels.
Previously, oil prices fell by as much as 83 cents. However, experts anticipated that the drop would not be prolonged given the weakness of the dollar and a more optimistic outlook for fuel demand in the US after the EIA data, according to PVM analyst Tamas Varga.
However, industrial orders in Germany unexpectedly fell in May, reinforcing signs that the recovery in Europe’s largest economy remains elusive.
Concerns about demand intensified after US data released on Wednesday. It showed that the number of first-time filers for unemployment benefits in the US increased last week, while the number of unemployed also rose.
In contrast, weaker economic data could accelerate interest rate cuts by the US Federal Reserve, analysts suggested. The move could support oil markets.
Swiss bank UBS expected the price of Brent crude to reach $90 a barrel this quarter, it said in a note to clients, citing OPEC+ production cuts and a projected decline in oil inventories.
