09:12 AM EDT, 06/06/2024 (MT Newswires) -- Oil prices rose for a second day early on Thursday as risk appetite is on the rise following interest-rate cuts by Canada and Europe.

West Texas Intermediate crude for July delivery was last seen up $US$0.39 to US$74.46 per barrel, while August Brent crude, the global benchmark, was up US$0.33 to US$78.74.

The two-day rally follows five-straight days of losses that came on signs of weak demand and an OPEC+ decision to begin returning 2.2-million barrels per day of supply cuts back to market beginning in October.

The Energy Information Administration on Wednesday said U.S. oil inventories rose by 1.2 million barrels per day last week, while most analysts expected stocks to fall. Gasoline and distillate inventories also climbed, a sign of weak demand despite the start of the U.S. driving season on the Memorial Day weekend. Still, with U.S. equities at record highs and central banks beginning to lower interest rates, traders are showing a willingness to bid up risky commodities.

"Crude oil trades higher for a second day, partly reversing an eight-dollar slump and most likely excessive reaction to recent growth and demand concerns as well as an OPEC+ decision (market conditions permitting) to increase supply from October," Saxo Bank noted. "We maintain the view crude oil will likely remain range bound with focus on summer peak demand and the general level of risk appetite."

The rise comes on revived hopes the Federal Reserve will soon move to lower interest rates after the Bank of Canada cut its benchmark interest rate by 25 basis points on Wednesday with the European Central Bank following suit on Thursday. The CME Fedwatch tool now expects the Fed to stand pat at its policy-committee meeting next week. The tool sees a small chance for a cut at the July 31 meeting and a 57% chance there will be a 25 basis point cut at the September meeting.

"Although fertile ground for further weakness was prepared after a $8/bbl losing streak, focus shifted to the macro world where hopes of rate cuts starting with the BoC yesterday and the ECB today, continuing with the Fed possibly in September were on the ascent with the inevitable consequences of healthy economic and oil demand growth," PVM Oil Associates noted.