(Bloomberg) — Oil rose for a third day on signs of stronger demand, and signals the Federal Reserve is getting close to its much-anticipated pivot.
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Brent crude rose toward $86 a barrel and West Texas Intermediate topped $83. Data this week showed improved consumption of gasoline and jet fuel in the US over the summer travel season. In addition, nationwide crude stockpiles posted another decline. Brent’s prompt spread pointed to tighter near-term conditions.
US inflation cooled broadly in June to the slowest pace since 2021, boosting bets that the Federal Reserve will start to reduce borrowing costs this quarter. That weighed on the US dollar — with a gauge of the currency set for the first back-to-back weekly drop since early May — making commodities more attractive for overseas buyers.
Oil has pushed higher this year as OPEC+ reined in production to tighten the market, offsetting supply increases from nations outside the cartel. The group predicts that worldwide crude consumption will expand by more than 2 million barrels a day this year, although the International Energy Agency has a more cautious view as China’s economy cools.
Recent moves in headline prices have been lackluster, with a gauge of volatility dropping to a six-year low. Even so, widely watched metrics indicate underlying strength. Brent’s prompt spread — the gap between the two nearest contracts — topped $1 a barrel in backwardation this week. That’s more than twice the difference a month ago.
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