Oil rises as stocks shrink

Oil rose for a second day, supported by a tightening U.S. inventories and broader risk appetite fueled by signs of easing U.S. inflation. Global benchmark Brent rose 0.5 percent on Wednesday to rise above $83 a barrel, while U.S. crude was above $79. U.S. oil inventories fell by 2.5 million barrels last week, the first back-to-back decline since March, and national inventories fell to their lowest level in almost a month. In broader markets, risk assets rose after U.S. inflation cooled for the first time in six months, providing space for the Federal Reserve to ease monetary policy. That pushed the U.S. dollar lower, with the Bloomberg gauge showing a third day of losses, making the commodity more attractive to overseas buyers. Crude has been trading higher since the start of the year as OPEC+ countries tightened supply, but prices pared gains since early April as tensions in the Middle East eased and some signs of product weakness emerged. The International Energy Agency cut its annual demand growth forecast by 140,000 bpd in a midweek report, but sees global demand still at a record annual 103.2 million bpd after revising last year’s consumption forecast. “Recent macro data from the U.S. has raised expectations that the Fed could start cutting rates soon, which will provide some support for oil,” said Warren Patterson, head of commodity strategy at ING Groep NV. Geopolitics also took center stage as Russian President Vladimir Putin arrived in Beijing for his first visit to China in his new term, highlighting the importance of relations with Moscow as it continues its war in Ukraine. Asia’s largest economy has seen more Russian crude flow in as buyers in Europe and the U.S. returned following the invasion.