Mumbai, 21 Mar (Commoditiescontrol): Crude oil prices rebounded on Thursday after falling in the previous session as U.S. crude and gasoline inventory declines supported the market after signs the U.S. Federal Reserve may keep rates higher for longer crimped the outlook for future fuel demand.
Brent crude oil futures contract for May settlement rose 0.6%, or 52 cents, at $86.47 a barrel, after falling 1.6% on Wednesday.
U.S. West Texas Intermediate futures for May delivery rose 0.5%, or 45 cents, to $81.72 a barrel, after falling 1.6% in the previous session. The April contract expired on Wednesday down 2.1% at $81.68.
Crude inventories in the U.S., the world's biggest oil consumer, fell for a second week, the U.S. Energy Information Administration (EIA) reported on Wednesday. Stockpiles declined unexpectedly by 2 million barrels to 445 million barrels in the week ended March 15, versus analysts' expectations in a Reuters poll for a 13,000-barrel rise.
The stockpiles fell as exports rose and refiners continued to increase activity. Gasoline inventories fell for a seventh week, down by 3.3 million barrels to 230.8 million, and suggesting steadily strong fuel demand.
Oil refinery runs ramped up by 127,000 barrels per day and utilization rates rose.
The inventory numbers gave some support to the market after a mixed outlook from U.S. Fed policy makers on rate cuts this year impacted prices earlier.
While the Fed Reserve kept interest rates in the 5.25% to 5.50% range on Wednesday, policy makers barely kept to an outlook for three rate cuts this year, which suggested rates may stay higher for longer.
The higher rates over a longer period could mean reduced economic growth which would impact future fuel demand.
But continued concerns on how Ukrainian attacks on Russian refineries would impact global petroleum supplies are supporting prices as well.
Ukraine has stepped up attacks on Russian oil infrastructure amid a more than two-year war, with at least seven refineries targeted by drones this month. The attacks have shut down 7%, or around 370,500 barrels per day, of Russian refining capacity, according to Reuters calculations.
Analysts say prolonged disruptions could force Russian producers to reduce supply if they are unable to export crude oil and face storage constraints.
(By Commoditiescontrol Bureau: 09820130172)
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