Oil prices inched higher on Thursday, supported by tightening U.S. crude inventories and rising demand from the summer driving season, though gains were capped by easing fears of supply disruptions from the Middle East. Brent crude settled up just 5 cents, or 0.07%, at $67.73 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 32 cents, or 0.49%, to $65.24.
The modest uptick followed a nearly 1% climb on Wednesday, as government data revealed U.S. crude stocks fell by 5.8 million barrels last week—far exceeding analyst expectations. Gasoline demand also picked up as the driving season gained momentum, signaling that U.S. fuel consumption remains resilient despite broader economic uncertainties.
Adding to the bullish tone, a weakening U.S. dollar—hitting a three-year low—made oil cheaper for foreign buyers and helped support prices. This came amid renewed speculation of interest rate cuts, fueled by reports that President Trump may soon nominate a new Federal Reserve chair.
However, optimism was tempered by signs of geopolitical de-escalation. Israeli Prime Minister Benjamin Netanyahu and President Trump both signaled a willingness to pursue diplomatic solutions with Iran. Trump emphasized continued pressure on Tehran, particularly on oil sales, but also hinted at potential leniency to support Iran’s economic recovery.
Overall, the market appeared to be balancing tighter inventories and firm U.S. demand with diminishing Middle East supply risks and macroeconomic headwinds, keeping crude prices relatively stable near the $65–$68 range.