Oil prices edged higher on Thursday on expectations that the US Federal Reserve will cut interest rates, while investors remained cautious ahead of a high-stakes US-Russia summit on Ukraine that could impact Russian crude supplies.
International benchmark Brent crude rose 0.21% to $65.61 a barrel at 10:26 a.m. local time (0726 GMT), up from $65.47 at Wednesday’s close.
US benchmark West Texas Intermediate (WTI) increased 0.29% to $62.28 a barrel from $62.10.
Expectations of a Fed rate cut in September are supporting oil prices, as US inflation rose at a moderate pace in July.
The annual inflation rate was 2.7%, below the market expectation of 2.8%. Analysts noted that the data eased concerns about the impact of US tariffs.
The likelihood of a 25-basis-point Fed rate cut in September is seen as near certain, with a 50-basis-point cut also under consideration.
US Treasury Secretary Scott Bessent suggested in an interview that the Fed should consider a 50-basis-point cut.
Lower policy rates are expected to boost US economic activity, supporting higher oil demand.
On the geopolitical front, US President Donald Trump threatened Russian President Vladimir Putin on Wednesday with "very severe consequences" if he does not agree to end the war in Ukraine during their summit on Friday in Alaska.
The comments come as Trump prepares to meet Putin face-to-face for the first time in his second term.
Experts said that progress toward a ceasefire could ease supply concerns and put downward pressure on prices, while a disagreement could continue to support prices.
However, oil prices came under pressure due to the International Energy Agency's forecast that global supply will grow faster than expected, driven by higher OPEC+ output and higher production from outside the group.
Meanwhile, US commercial crude oil inventories rose by 3 million barrels last week, contrary to a forecasted decline of 900,000 barrels, raising concerns about demand in the world's largest oil consumer and weighing on prices.
By Firdevs Yuksel
Anadolu Agency
energy@aa.com.tr