Strong fuel demand data lifts oil prices

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by Laura Sanicola

(Reuters) – Oil prices rose in early Asian trade on Thursday after strong fuel demand in the U.S. raised concerns about the possibility of a default on consumer debt the world's biggest oil producer.

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

The latest US data showed consumer prices rose in April, raising the prospect that the Reserve will keep interest rates high, which could have the -on effect of dampening oil demand. Rising global interest rates have pressured oil prices in recent months, with traders worried about a recession.

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

US gasoline inventories fell by 3.2 million barrels last week, much higher than analysts forecast for a 1.2 million barrel draw. Data from the US Energy Information Administration showed on Wednesday that distillate stocks also declined. [EIA/S]

US jet fuel demand reached its highest level since December 2019.

Meanwhile, detailed talks on raising the US government's $31.4 trillion debt limit began on Wednesday, with Republicans pushing for spending cuts.

The impasse has unsettled investors, sending the cost of insuring the risk to US government debt to record lows, as Wall Street grows more concerned about the risk of an unprecedented default.

(Reporting by Laura Sanicola; Editing by Christopher Cushing)