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Oil prices climb on hopes for demand in the US

by Holly

Oil prices rose in European trade on Thursday on track for the second profit in three days, almost hitting three-month highs on hopes for US demand.

US commercial crude stocks fell last week during the summer driving reason, with increasing fuel demand and speculation the Federal Reserve will end the cycle of policy tightening soon.

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Global Oil Prices

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US crude rose 0.6% to $75.71 a barrel, while Brent added 0.75% to $79.88 a barrel, with a session-low at $79.29.

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US crude lost 0.6% on Wednesday, while Brent lost 0.3% under pressure from stronger dollar.

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US Stocks

The Energy Information Administration reported a decline in US crude stocks by 700 thousand barrels to 457.4 million barrels last week, while analysts expected a drop of two million barrels.

Gasoline stocks fell 1.1 million barrels to 218.4 million barrels, as distillate stocks stabilized at 118.2 million barrels unchanged.

The Fed

The Federal Reserve is on track for a 0.25% interest rate hike next week, expected to be the last this cycle.

The bank will likely announce a long pause in policy tightening in order to reduce negative pressures on US GDP, which in turn could boost fuel demand.

Chinese Commitment

China’s government has vowed to expand local spending in the world’s second largest economy, in turn boosting fuel demand.

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