WASHINGTON (dpa-AFX) - Despite data showing an unexpected jump in crude oil inventories in the U.S. in the week ended June 7th, oil prices climbed higher on Wednesday on hopes of increased demand, and tighter supply conditions later in the year.
Oil was also supported by a weak dollar. Still, the jump in inventories limited oil's gains.
West Texas Intermediate Crude oil futures for July ended up by $0.60 at $78.50 a barrel.
Brent crude futures were up $0.60 or 0.73% at $82.52 a barrel a little while ago.
Data from the Energy Information Administration (EIA) showed crude oil inventories jumped by 3.7 million barrels last week, after rising by 1.2 million barrels a week earlier. Economists had expected crude oil inventories to decrease by 1.6 million barrels.
At 459.7 million barrels, U.S. crude oil inventories remain about 4% below the five-year average for this time of year, the EIA said.
The EIA data also showed gasoline inventories shot up by 2.6 million barrels last week and are just slightly below the five-year average for this time of year. Meanwhile, distillate fuel stockpiles edged up by 0.9 million barrels last week, but are about 7% below the five-year average for this time of year.
The U.S. Labor Department said its consumer price index came in unchanged in May after rising by 0.3% in April. Economists had expected consumer prices to inch up by 0.1%. The unchanged reading came as a 3.5% nosedive by gasoline prices helped offset a continued increase in prices for shelter.
Core consumer prices rose by 0.2% in May after climbing by 0.3% in April. Core prices were expected to increase by another 0.3%.
The report also said the annual rate of consumer price growth slowed to 3.3% in May from 3.4% in April. Economists had expected the pace of growth to remain unchanged. The annual rate of core consumer price growth also slowed to 3.4% in May from 3.6% in April. The pace of growth was expected to dip to 3.5%.
The Fed left interest rates unchanged today, as widely expected, and revealed officials now expect only one interest rate cut this year.
The Fed acknowledged modest further progress toward its inflation objective in recent months but said officials still need 'greater confidence' inflation is moving sustainably towards the target before they will consider lowering rates.
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