Oil prices rise ahead of US inventory data

Oil drilling rigs

Oil prices rose, on July 27, driven by forecasts of a decline in US oil inventories, especially as investors are anticipating the US Energy Information Administration’s (EIA) report and the Federal Reserve’s interest-rate hike decision.

According to estimates of the American Petroleum Institute (API), the US crude inventories fell by 4 million barrels in the week ended on July 22, with gasoline and distillate inventories declining 1.06 million and 550,000 barrels, respectively.

US Treasury Secretary Janet Yellen discussed the proposal to put a cap on Russian oil prices in a phone call with UK Finance Minister Nazim Al-Zahawi, in a move aimed at reducing the impact of the Russian-Ukraine on global energy prices, Reuters reported.

Meanwhile, the Federal Reserve is expected to hike the interest rates by 75 basis points (bps) later today, underscoring concerns about the outlook for US demand and rise in the dollar, which would further increase the cost of dollar-denominated commodities, including crude oil.

Brent crude futures for September delivery were up 0.77% to $105.20 a barrel at 9:10 am Makkah time. Meanwhile, West Texas Intermediate (WTI) crude rose 0.97% to $95.84 a barrel.