Oil Futures Show Modest Gain as Investors Await Data

Oil futures were up modestly early Thursday as investors eagerly awaited official data on U.S. crude inventories. The market is buzzing with optimism as expectations grow that the Federal Reserve interest rate-hike cycle is nearing its end.

Price Action

• West Texas Intermediate crude for August delivery was up 23 cents, or 0.3%, at $75.89 a barrel on the New York Mercantile Exchange.
• September Brent crude, the global benchmark, rose 40 cents, or 0.5%, to $80.03 a barrel on ICE Futures Europe.
• August gasoline fell 0.2% to $2.69 a gallon, while August heating oil was up 0.8% at $2.616 a gallon.
• August natural gas declined 0.5% to $2.605 per million British thermal units.

Market Drivers

Commodities strategists at ING, Warren Patterson and Ewa Manthey, expressed their positive outlook for oil, stating, "Oil has reacted positively to the expectation that we are approaching the end of the hiking cycle." They also predicted that Brent prices would solidly surpass $80 a barrel in the second half of the year due to tightening supplies.

However, the strategists highlighted the importance of speculative sentiment, emphasizing that a significant shift is necessary for a convincing price movement. They noted that while speculative buying has increased recently, it remains relatively modest considering the expected tightening in the physical market.

The American Petroleum Institute reported a decrease of 798,000 barrels in U.S. crude inventories last week, alongside a decline of 2.8 million barrels in gasoline stocks. Official data from the Energy Information Administration is set to be released on Wednesday morning, with analysts projecting a fall of 2.25 million barrels in crude inventories, a decrease of 900,000 barrels in gasoline stocks, and flat distillate inventories.