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Oil rises on hopes US will replenish its strategic reserve

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Brent crude futures for July added 58 cents, or 0.7%, to $84.02 a barrel and U.S. WTI crude for June jumped 53 cents, or 0.7%, to $79.53 a barrel

Oil prices rose on Thursday, bouncing back from three days of losses, on expectations the lower levels may prompt the U.S., the world’s biggest crude consumer, to begin replenishing its strategic reserve, putting a floor under prices.

Still, prices dropped more than 3% on Wednesday to a seven-week low after the U.S. Federal Reserve kept interest rates steady, which may curtail economic growth this year and limit oil demand increases.

Crude was also pressured by an unexpected rise in U.S. crude inventories and signs of an impending Middle East ceasefire that would ease Middle East supply concerns.

Brent crude futures for July advanced 58 cents, or 0.7%, to $84.02 a barrel by 0633 GMT on Thursday. U.S. West Texas Intermediate (WTI) crude for June jumped 53 cents, or 0.7%, to $79.53 a barrel.

The oil market was supported by speculation that if West Texas Intermediate drops below $79, the U.S. will move to build up its strategic reserves, according to Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.

The U.S. has said it aims to replenish the Strategic Petroleum Reserve (SPR) after a historic sale from the emergency stockpile in 2022 and wants to buy back oil at $79 a barrel or less.

The U.S. Energy Information Administration said crude inventories increased by 7.3 million barrels to 460.9 million barrels in the week ended April 26.

Crude stocks were at the highest point since June, according to the Energy Information Administration.

Still, continuing supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, will support prices.

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