The price of oil increased by more than 1% during Wednesday as strong U.S. demand indicators countered ongoing worries about Middle East tensions and worldwide economic growth.
The price of Brent crude oil increased by 82 cents to reach $67.96 per barrel while West Texas Intermediate rose by 83 cents to $65.20 per barrel during late morning trading.
The market experienced a positive shift after the U.S. Energy Information Administration released data showing crude oil and gasoline and distillate stockpiles decreased more than market predictions during the previous week. The crude inventory reduction of 5.8 million barrels exceeded expectations because refineries maintained high operational levels and consumers used more fuel.
The report caused market participants to direct their attention toward domestic fundamentals instead of the Israel-Iran ceasefire uncertainties which the U.S. had brokered.
The market received additional support from the possibility of Federal Reserve interest rate reductions. Market participants now predict that the Federal Reserve will initiate interest rate reductions starting from July because economic indicators show slowing growth and low inflation rates.
The ceasefire remains stable but President Trump stated that it might not persist while he continued to enforce sanctions against Iran.
OANDA analyst Kelvin Wong stated that the market is currently adjusting its pricing structure. The market has stabilized because demand remains strong while the Federal Reserve shows signs of becoming more dovish.
