Oil prices rose on Thursday on expectations that the United States will start buying crude to replenish its oil reserves after prices plunged to a seven-week low, amid hopes of a ceasefire in the Gaza Strip, rising U.S. inventories and uncertainty over a U.S. interest rate cut.
After three days of losses, Brent crude futures for July delivery rose 21 cents, or 0.3 percent, to $83.65 a barrel by 0026 GMT. U.S. West Texas Intermediate crude for June delivery rose 22 cents, or 0.3 percent, to $79.22 a barrel.
Both benchmarks fell more than 3 percent on Wednesday to their lowest level in seven weeks.
The oil market has been supported by speculation that if WTI crude falls below $79, the United States will move to fill its strategic reserves, said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
The United States aims to replenish its strategic oil reserve after a historic drawdown from emergency stockpiles in 2022, and is looking to buy back oil at $79 a barrel or less.
If a ceasefire, even a temporary one, is agreed in Gaza, market attention is likely to shift to oil demand in the United States as the driving season approaches, Kikukawa said.
Expectations are growing in the Middle East that a ceasefire agreement between Israel and the Islamic Resistance Movement (Hamas) may be on the horizon amid a new effort led by Egypt.
However, Israeli Prime Minister Benjamin Netanyahu vows to press ahead with his long-threatened attack on the southern Gaza city of Rafah, despite the US position and a UN warning that it would lead to tragedy.
The U.S. Energy Information Administration said crude inventories rose by 7.3 million barrels to 460.9 million barrels in the week to April 26, compared with analysts' expectations in a Reuters poll for a 1.1 million-barrel drop.
The Energy Information Administration said crude inventories reached their highest levels since June.
Meanwhile, the Federal Reserve (the US central bank) held interest rates steady on Wednesday.
