Oil prices inched up on Thursday due to a decline in crude stocks, following an increase in processing by US refineries and a reduction in gasoline inventories, indicating a stronger demand. Brent futures increased by 35 cents, or 0.4%, reaching $85.43 per barrel. Meanwhile, West Texas Intermediate (WTI) crude climbed by 36 cents, or 0.5%, to $82.47 per barrel.

US crude inventories dropped by 3.4 million barrels to 445.1 million barrels for the week ending July 5, significantly surpassing the expectations of a 1.3 million-barrel decrease as predicted by analysts in a Reuters poll. Gasoline stocks also decreased by 2 million barrels to 229.7 million barrels, a much larger drop than the anticipated 600,000-barrel reduction during the U.S. Fourth of July holiday week.

The Organization of the Petroleum Exporting Countries maintained its forecast for robust growth in global oil demand for both 2024 and the next year, stating on Wednesday that sustained economic growth and air travel would bolster fuel consumption during the summer months. However, price increases were limited due to minimal disruptions at refineries and offshore production facilities caused by Hurricane Beryl.

Additionally, this week's U.S. inflation data, including the Consumer Price Index on Thursday and the Producer Price Index report on Friday, could influence market sentiment. The likelihood of a 25-basis-point rate cut by September has risen to 74%, up from around 70% on Tuesday and 45% a month ago, according to CME's FedWatch. Lower interest rates can reduce borrowing costs, potentially stimulating economic activity and increasing oil demand. Federal Reserve Chair Jerome Powell emphasized on Wednesday that the U.S. central bank will adjust interest rates as necessary, countering the notion that a September rate cut might be politically motivated ahead of the fall presidential election.