Oil prices rebound on expectations that the Fed will cut rates next month.

A U.S. government report on Wednesday showed that crude oil, gasoline, and distillate inventories fell more than expected last week, indicating a recovery in demand.

Oil prices rose on Thursday as expectations of a U.S. interest rate cut in the coming weeks fueled a rebound after four days of price declines.

Brent crude futures gained $1.17, or 1.54%, to $77.22 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rose $1.08, or 1.5%, to $73.01 per barrel.

Minutes from the Federal Reserve’s July meeting, released on Wednesday, showed that most Fed officials believed the central bank was on track to cut interest rates next month.

The U.S. Department of Labor reported an increase in unemployment benefit claims last week, but the figure appeared to stabilize at a level consistent with a gradual cooling of the labor market, setting the stage for a rate cut.

Additionally, a U.S. government report on Wednesday showed that crude oil, gasoline, and distillate inventories fell more than expected last week, signaling a recovery in demand.

In the Middle East, Iran-aligned Houthi militants continued their attacks on international maritime transport in solidarity with Palestinians in the ongoing conflict between Israel and Hamas.

A Greek-flagged tanker carrying 150,000 tons of crude oil was evacuated by its crew after being attacked in the Red Sea, now posing an environmental threat.