Oil prices rose for a second day in a row, as signs of growing demand and a positive trend in broader markets helped support traders' sentiment.
Benchmark Brent crude rose above $85 a barrel on Wednesday, while West Texas Intermediate crude approached $82 a barrel. U.S. national inventories fell by 3.4 million barrels last week, as jet fuel and gasoline consumption continued to rise amid the summer travel season.
Oil prices rose as global stocks rose, with U.S. stocks hitting a fresh high ahead of inflation data later Thursday that could boost investors' expectations of a Federal Reserve rate cut before the end of the year.
Crude oil prices have been rising this year, supported by OPEC+ supply cuts. The relatively muted price action has seen volatility fall to a six-year low this month. While some OPEC+ members continue to pump above their agreed production ceiling, Russia, a major producer, made significant cuts in June.
The widely watched spreads between futures contracts for oil are showing signs of market strength. The spread between the nearest two Brent contracts, or spot spread, was about 89 cents a barrel, compared with 38 cents a month ago, in backwardation, which indicates higher prices, as the premium to the near-term contracts is higher than the premium to the longer-term contracts.
Traders are awaiting the monthly market report, which will be issued by the International Energy Agency today, and includes an assessment of global crude stocks in the current half.
