Brent crude is above $87 a barrel

Brent crude oil prices held above $87 a barrel on Thursday, near their highest level since late April, after data the previous day showed a drop in U.S. inventories.

Brent crude futures were down 29 cents, or 0.3 percent, at $87.05 a barrel by 1323 GMT. US. West Texas Intermediate (WTI) crude futures were down 40 cents, or 0.5%, at $83.48 in light trading on the US Independence Day holiday.

In the previous session, Brent gained 1.3% to settle at $87.34 for its highest close since April 30. WTI, meanwhile, hit an 11-week high of $83.88.

Those gains followed a bigger-than-expected drop in U.S. crude inventories. The US Energy Information Administration (EIA) reported a drawdown of 12.2 million stocks. Analysts polled by Reuters were expecting an extraction of 680,000 barrels.

Oil prices had previously fallen as much as 83 cents, but the decline was not expected to last given the weakness of the dollar and a better outlook for US fuel demand after the EIA data, PVM analyst Tamas Varga said, reported Reuters.

However, German industrial orders unexpectedly fell in May, adding to signs that a recovery for Europe’s biggest economy remains elusive.

Concerns about demand were heightened by US data on Wednesday showing that first-time claims for US jobless benefits rose last week, while the number of unemployed also rose.

Conversely, weaker economic data could hasten interest rate cuts by the US Federal Reserve, analysts said, which could support oil markets.

Weaker US data has already led markets to raise the likelihood of a rate cut in September to 74% from 65%.

Swiss bank UBS expects Brent crude to reach $90 a barrel this quarter, it said in a note to clients, citing OPEC+ production cuts and projected declines in oil inventories.