FX.co ★ Oil Prices Climb On US Fuel Demand Optimism

Oil prices climbed on Thursday as strong fuel demand data coupled with optimism over the Federal Reserve cutting interest rates later this year outweighed U.S. debt ceiling worries.

Benchmark Brent crude futures rose a little over 1 percent to $77.18 a barrel, while WTI crude futures were up nearly 1 percent at $73.27.

Latest data from the U.S. Energy Information Administration (EIA) showed that gasoline inventories declined by 3.2 million barrels last week, raising optimism about strong fuel demand from the world's top oil consumer.

Distillate fuel inventories, which include diesel and heating oil, tumbled by 4.2 million barrels, helping offset worries surrounding recession and the U.S. debt ceiling.

U.S. jet fuel demand rose to its highest level since December 2019, suggesting demand for transport fuels remains resilient in the U.S.

Meanwhile, softer-than-expected U.S. inflation data raised hopes that the Fed would start cutting rates this year to shore up the economy.

The dollar traded higher in European trade ahead of U.S. producer price inflation data due out later in the day.

The Bank of England's rate decision is also due later in the day.