Oil rises supported by declining inventories and interest rate cut expectations

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Oil rises supported by declining inventories and interest rate cut expectations

Oil prices increased in early Asian trading on Thursday, continuing the upward trend in the previous session. The rise was supported by a larger-than-anticipated weekly withdrawal from US crude inventories and signals from the Council. The US central bank, Federal Reserve, has indicated that it plans to start reducing borrowing costs in 2024.

Reduced interest rates can lead to lower borrowing costs for consumers, resulting in increased economic growth and demand for oil. Additionally, this can cause a decline in the value of the dollar, which in turn makes oil more affordable for foreign buyers.

Brent crude futures increased by 46 cents or 0.6% to reach $74.72 per barrel at 0007 GMT, whereas Western crude rose 48 cents or 0.7% to $69.95 for US Texas Intermediate.

Concerns about oil supply security in the Middle East rose after a tanker attack in the Red Sea, causing prices to increase in the previous session.