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Brent futures dipped 13 cents, or 0.2%, to $84.95 a barrel by
1120 GMT and U.S. West Texas Intermediate (WTI) crude was down 6
cents, or 0.1%, at $82.79. Both had registered gains in the
previous session.
"Profit-taking is reasonable ahead of the U.S. jobless claims
data, which will shape investors' view on (interest) rate cuts
this afternoon," said Tamas Varga of oil broker PVM.
Crude inventories in the United States, the world's largest oil
consumer, fell by 4.9 million barrels last week, data from the
U.S. Energy Information Administration showed on Wednesday. That
exceeds a decline of 30,000 barrels forecast by analysts in a
Reuters poll and a drop of 4.4 million barrels in an American
Petroleum Institute report.[EIA/S][API/S]
"Healthy demand signals from the U.S. outweigh concerns from
modest Chinese growth last week," said Priyanka Sachdeva, senior
market analyst at Phillip Nova.
"Hopes of a Fed easing (of interest rates), which can boost
economic growth, and current summer travel in the U.S. are
ensuring enough traction in oil demand from the world's largest
economy."
The prospects of cuts to interest rates in both the U.S. and
Europe over the coming months helped to support the market.
Federal Reserve officials said on Wednesday that the U.S.
central bank is closer to cutting rates given inflation's
improved trajectory and a labor market in better balance,
possibly setting the stage for a reduction in September.
U.S. economic activity expanded at a slight to modest pace from
late May through early July with firms expecting slower growth
ahead.
The European Central Bank, meanwhile, is all but certain to keep
interest rates unchanged on Thursday, but it signaled that its
next move is likely to be a cut.
However, Chinese economic growth remains a concern. Chinese
leaders signaled on Thursday that Beijing would stay the course
with economic policy, though few concrete details were
disclosed. Together, those helped to check investor hopes of a
push to boost consumption in the world's second-largest economy.
"There is no clear signal of change in macro policies," said
Zhang Zhiwei, chief economist at Pinpoint Asset Management.
The dollar, meanwhile, was down for a third straight session. A
weaker U.S. currency can boost demand for oil by making
dollar-priced commodities cheaper for buyers holding other
currencies.
(Reporting by Paul Carsten in London, Arunima Kumar in Bengaluru,
Arathy Somasekhar in Houston and Jeslyn Lerh in SingaporeEditing
by David Goodman)
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