Crude oil prices: Brent, WTI rise as US inventories fall sharper-than-expected

Crude oil prices rose in the early trade on Thursday, July 18, in the aftermath of the data released by the United States pointing towards a sharper-than-expected decline in American oil inventories.

Global crude benchmark Brent was up 0.33%, as its futures for September delivery were trading at $85.37 per barrel at 0205 hours GMT.

The U.S. West Texas Intermediate (WTI) logged a sharper gain, as its futures for August delivery were trading 0.56% higher at $83.32 a barrel.

The drawdown was higher as compared the estimate of 30,000-barrel drop, as shared by analysts polled by Reuters.

Optimism over Fed rate-cut

Oil prices were also supported by the growing optimism over interest rate cuts by the US Federal Reserve in the near future.

The prospects of a rate cut increased after US Federal Reserve officials, who have convened for a meeting, said on Wednesday that the monetary body was "close" to reducing the benchmark lending rates in view of the inflation's downward trajectory.

Earlier this week, Jerome Powell, the Fed chairman, expressed concern over keeping rates elevated over a longer period of time.

“The implication of that is that if you wait until inflation gets all the way down to 2%, you’ve probably waited too long, because the tightening that you’re doing, or the level of tightness that you have, is still having effects which will probably drive inflation below 2%,” he said on Monday, while speaking at the Economic Club of Washington D.C.

A lower lending rate would spur consumption, which in turn would increase oil demand in the world's largest economy.