Oil Prices Rise Amid US Inventory Data Reassessment

Global oil prices experienced a slight increase on Thursday, following two successive sessions of decline. This recovery is due to investors re-evaluating the latest data concerning U.S. crude oil and gasoline inventories, which has prompted them to return to purchasing mode.

The more actively traded June contract increased by 28 cents or 0.33% to reach $85.69 at 0041 GMT, while Brent crude futures for May delivery rose by 29 cents or 0.34% to settle at $86.38 per barrel. This May contract expires on Thursday.

Meanwhile, U.S. West Texas Intermediate (WTI) crude futures for May were up by 41 cents, or 0.50%, standing at $81.76 per barrel.

In the previous trading session, oil prices fell under pressure after an unexpected rise in U.S. crude oil and gasoline inventories last week was reported—a phenomenon that was primarily driven by an increase in crude imports coupled with sluggish demand for gasoline, as revealed by data from the Energy Information Administration (EIA).

However, this surge in crude stockpiles was less than what had been projected earlier on by the American Petroleum Institute, hence causing some relief among market players.

Accordingly, Bjarne Schieldrop, Chief Commodities Analyst at SEB Research, said, "We...expect US inventories to rise less than normal, reflecting a global oil market slightly in deficit." He further added that "this will likely lend support to stabilizing the Brent crude oil price going forward."

The recent disappointing inflation data affirms the Federal Reserve's decision not to rush into cutting its short-term interest rate target, according to one Fed governor who spoke out Wednesday, although he did not rule out potential rate cuts later within the year.

"The market seems to be converging upon a June start date for cuts from both the Fed and the European Central Bank," JPMorgan analysts noted in their report. They further added that lower interest rates would help support oil demand.

This news comes at a time when global oil markets are in a state of flux due to various economic and geopolitical factors, including the ongoing US-China trade war, uncertainty over Brexit, and potential supply disruptions from Venezuela and Iran.

Investors will be closely watching developments on these fronts as they try to gauge their likely impact on future crude prices. For now, though, it appears that market sentiment has shifted back towards buying mode—at least for the short term.

In conclusion, while there is still considerable uncertainty surrounding the future direction of oil prices, recent data on U.S. stocks seems to have provided some much-needed relief for investors who were worried about an oversupply situation. However, with many variables still in play—not least the actions of major central banks—it remains to be seen whether this recovery can be sustained over the longer term.