Oil prices rise on hopes of U.S rate cuts boosting fuel demand [Video]

Oil prices rose on Thursday, recovering some of the previous day’s loss, on hopes of potential U.S. interest rate cuts boosting economic activity and fuel demand, though lingering concerns over slower global demand capped gains.

Brent crude futures climbed 17 cents, or 0.2%, to $79.93 a barrel by 0029 GMT. U.S. West Texas Intermediate crude increased by 23 cents, or 0.3%, to $77.21 per barrel.

Both benchmarks fell more than 1% on Wednesday after U.S. crude inventories rose unexpectedly and on easing worries about a wider Middle East conflict.

U.S. consumer prices rose moderately in July and the annual increase in inflation slowed to below 3% for the first time in nearly 3-1/2 years, reinforcing expectations the Federal Reserve will cut interest rates next month.

“We saw a correction in Asia trade as the oil market was oversold on Wednesday,” said Yuki Takashima, economist at Nomura Securities, adding that investors are betting the Fed could start cutting rates next month.

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