Oil prices eased today (Thursday), with Brent crude holding close to January highs, as speculation about another U.S. interest rate hike faded following inflation data and OPEC remained positive on the oil demand outlook.

Both benchmarks have been on a sustained rally since June, trading at its highest this year on Thursday and Brent hitting its highest price since January.

Oil prices were boosted in recent days by extensions to output cuts by Saudi Arabia and Russia, alongside supply fears driven by the potential for conflict between Russia and Ukraine in the Black Sea region to threaten Russian oil shipments.

On Thursday, OPEC said in its monthly report it expected a healthy oil market for the rest of the year, and stuck by its forecast for robust oil demand in 2024, as the outlook for world economic growth slightly improves.

"Commentators and traders alike are much concentrated on fundamentals rather than what might be ailing the wider macroeconomic suite," said John Evans of oil broker PVM.

"The poor state of China’s manufacturing, its property sector and some stubborn world inflation stand out as issues that the oil fraternity chooses to ignore at present."

Thursday's U.S. consumer prices data for July fuelled speculation the Federal Reserve is nearing the end of its aggressive rate hike cycle.

Markets largely shrugged off a higher-than-expected 5.85 million-barrel build in U.S. crude stocks reported on Wednesday, after a record drawdown the week before.

Meanwhile, recent data showed the consumer sector in China fell into deflation and factory gate prices extended declines in July, raising concerns about fuel demand in the world's second-largest economy.

Fuel card users can expect a further increase next week in the region of 1.8 pence per litre.

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