Brent, WTI Oil Benchmark Get Boost on Falling US Crude Inventories

Brent crude oil, against which Nigerian oil is priced, gained 23 cents, or 0.31 percent, to settle at $74.45 a barrel on Thursday, while the US West Texas Intermediate (WTI) crude oil lost 28 cents, or 0.4 percent, to $70.67 a barrel after data showed falling crude and fuel inventories in the United States.

US crude inventories fell by 2.2 million barrels to 420.6 million barrels in the week ended October 11, the Energy Information Administration (EIA) said on Thursday.

The inventory change compares with a sizable build of 5.8 million barrels the previous week, which pressured oil prices.

A day before the EIA released its latest numbers, the American Petroleum Institute (API) estimated an unexpected drop in crude oil inventories that helped prices on their way up. The API said inventories had shed 1.58 million barrels in the week to October 11.

Meanwhile, the EIA also estimated an inventory draw in gasoline and another one in middle distillates for the reporting period.

Meanwhile, the European Central Bank (ECB) cut interest rates for the third time this year on Thursday, indicating that inflation in the eurozone is now increasingly under control and the economic outlook has worsened.

This move lent support to oil prices and will likely continue to do that as it makes borrowing cheaper, potentially boosting demand.

Earlier in the week, traders rushed to sell following the latest monthly updates from the Organisation of the Petroleum Exporting Countries (OPEC) and the International Energy Agency after they revised their oil demand projections down, for the third month in a row.

OPEC now expected demand growth this year at 1.95 million barrels per day, down from some 2.25 million barrels per day, at the beginning of the year and the IEA sees oil demand inching up by less than 1 million barrels daily this year.

On the geopolitical front, uncertainty extended of an Israel retaliatory attack on Iran for sending a barrage of missiles almost three weeks ago.

There had been initial reports of striking Iran, a member of OPEC, via its oil and gas infrastructure but the US has convinced the country not to take that approach.

Pressure came as the US Dollar rose in the currency market. A stronger greenback makes commodities like oil which is priced in the US currency more expensive and can hurt demand.

The market is also watching China for more details following its recently announced plans to revive its weakening economy.