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Oil climbs on optimistic demand outlook

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Oil prices ticked higher on Wednesday amid upbeat global demand views from the US Energy Information Administration and OPEC, reinforced by industry data showing US crude oil inventories fell more than expected last week.

Brent crude futures rose 50 cents, or 0.6 per cent, to $82.42 a barrel at 0630 GMT, while US West Texas Intermediate (WTI) crude futures gained 62 cents, or 0.8 per cent, to $78.52, according to a Reuters report.

The EIA raised its 2024 world oil demand growth forecast to 1.10 million barrels per day from a previous estimate of 900,000 bpd, while the Organisation of the Petroleum Exporting Countries (OPEC) maintained its 2024 forecast for relatively strong growth in global oil demand, citing expectations for travel and tourism in the second half.

Prices had eased more than 2 per cent last week after OPEC and its allies said they would phase out output cuts starting October.

"Crude oil edged higher as OPEC maintained its forecasts for strengthening demand," ANZ analysts said in a note, adding that demand for oil is likely to be driven by China and other emerging economies.

"Despite announcing last week that it will start to phase out some of the voluntary cuts later this year, its forecasts suggest it should be easily accepted by the market."

Meanwhile, US crude oil stocks fell by 2.428 million barrels in the week ended June 7, according to market sources citing American Petroleum Institute figures. The decline was bigger than analysts polled by Reuters had expected.

Data from the EIA, the US government's statistics arm, is due at 10:30 a.m. EDT (1430 GMT) on Wednesday.

Investors also looked forward to the US Consumer Price Index report, which will be released before the bell on Wednesday, and the US central bank's policy announcement, due later the same day.

"Expectations for a dovish Fed at the upcoming meeting should support the oil upside momentum today," said Tina Teng, an independent market analyst, as a dovish stance would stimulate economic growth and boost oil demand.

"However, the global economic slowdown could remain a bearish factor in the long term."

In China, the world's largest crude importer, consumer inflation held steady in May while producer price declines eased, indicating Beijing would need to do more to prop up feeble domestic demand and an uneven economic recovery.

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