Oil prices rose slightly in Asian trade on Wednesday amid continued cheer over stimulus measures in top importer China, while traders awaited more cues on the U.S. economy and oil inventories.
Gains in crude markets were limited by resilience in the dollar, which firmed ahead of key U.S. inflation data due later in the day, which is likely to factor into the outlook for interest rates.
Geopolitical tensions also kept oil’s risk premium in play, as traders awaited the formation of a new government in Syria after rebels ousted President Bashar al-Assad.
Brent oil futures expiring in February rose 0.4% to $72.47 a barrel, while West Texas Intermediate crude futures rose 0.4% to $68.55 a barrel by 20:41 ET (01:41 GMT).
US inventories see unexpected build- API
Data from the American Petroleum Institute showed on Tuesday that U.S. oil inventories unexpectedly grew by about 0.5 million barrels in the week to December 6, against expectations for a draw of 1.3 mb.
The API data also showed increases in gasoline and distillate inventories for a second straight week, indicating some resilience in U.S. supplies amid record-high oil production in the country.
Demand is also expected to dwindle with the winter season, likely keeping inventories high in the coming months.
The API data usually heralds a similar reading from official inventory data, which is due later on Wednesday.
Oil buoyed by China stimulus; OPEC report awaited
Oil prices marked some gains this week after China- the world’s biggest oil importer- pledged to loosen monetary policy and enact more targeted stimulus measures to boost economic growth.
The announcement ramped up hopes that Chinese oil demand will recover on stronger economic growth. Trade data showing a sharp increase in Chinese oil imports through November also aided sentiment.
Still, traders were awaiting more insight into Beijing’s plans for increased stimulus. The Central Economic Work Conference, which begins later on Wednesday, is expected to offer more cues.
Beyond China, focus this week is on key U.S. consumer price index data due later on Wednesday, for more cues on interest rates. The dollar firmed in anticipation of the reading.
The Organization of Petroleum Exporting Countries is expected to release a monthly report later on Wednesday, after the cartel had last week agreed to extend its current run of supply cuts until the second quarter of 2025.
Source : Investing.com