Oil prices rise on strong fuel demand data

Oil prices rose in early Asian trade on Thursday after strong demand for fuels in the US outweighed concerns about the possibility of the world's biggest oil producer and consumer defaulting on its debt.

Brent crude futures rose by 26 cents, or 0.34 per cent, to $76.67 a barrel by 0015 GMT. US crude futures rose 28 cents to $72.84.

Latest US data showed consumer prices rose in April, increasing the likelihood that the Federal Reserve will maintain higher interest rates which can have the knock-on effect of reducing oil demand. Rising global interest rates have weighed on oil prices in recent months, with traders concerned about recession.

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However, fuel demand in the US is showing signs of strength.

US gasoline inventories fell by 3.2 million barrels last week, much more than the 1.2 million barrel draw forecast by analysts. Distillate stocks also declined, data from the US Energy Information Administration showed on Wednesday.

US jet fuel demand rose to its highest level since December 2019.

Meanwhile, detailed talks on raising the US government's $31.4 trillion debt ceiling kicked off on Wednesday with Republicans continuing to insist on spending cuts.

The standoff has rattled investors, sending the cost of insuring exposure to US government debt to record highs, as Wall Street grows more concerned about the risk of an unprecedented default.