Oil prices rose on Wednesday as US data revealed that the crude stockpiles decreased more than anticipated, signaling an improvement in demand situation in the country, however, rising Covid cases in China limits further upticks.
International benchmark Brent crude traded at $88.45 per barrel at 10.00 a.m. local time (0700GMT), a 0.10% increase from the closing price of $88.36 a barrel in the previous trading session.
The American benchmark West Texas Intermediate (WTI) traded at $81.04 per barrel at the same time, a 0.11% gain after the previous session closed at $80.95 a barrel.
Expectations of a hefty drop in US crude oil inventories was the driver for the upward price trend.
Late Tuesday, the American Petroleum Institute (API) announced its estimate of a fall of 4.8 million barrels in US crude oil inventories relative to the market expectation of a decline of 2.2 million barrels.
A strong inventory decrease implies an uptick in crude demand in the US, assuaging market concerns over falling demand.
The US Energy Information Administration (EIA) will release official oil stock data later Wednesday, and if a build in stock levels is confirmed, prices will fall.
However, rising coronavirus cases in China, the world’s largest crude oil importer, is supressing demand euphoria as country’s strict zero-covid policy reduces hopes for short-term demand recovery in the country.
Source: Anadolu Agency