Even as markets closely track conflicts in the Middle East, oil prices continued rising on Wednesday after industry data showed a surprise decline in U.S. crude stockpiles last week, indicating strong demand.
Brent crude futures were up 26 cents, or 0.29%, at $88.68 a barrel, and WTI crude futures were up 26 cents, or 0.31%, at $83.62 a barrel at 06:34 GMT.
US crude oil inventories fell by 3.237 million barrels in the week ending April 19, according to market sources citing figures from the American Petroleum Institute (API). In contrast, analysts expected an increase of 800,000 barrels.
Investors will be watching official US oil and product stockpile data to be released at 1430 GMT for confirmation of the decline in stocks.
Business activity in the US fell to a four-month low in April, the Composite PMI Output Index, which tracks the manufacturing and services sectors, said on Tuesday, falling to 50.9 this month from 52.1 in March.
This could convince policymakers that interest rate cuts are necessary to support the economy. US interest rate cuts could support economic growth and increase oil demand in the world’s largest fuel consumer.
Overall, the ongoing Middle East risk premium supports crude oil prices at current levels. Analysts are still positive that the latest developments regarding the conflicts in the Middle East will support the markets; However, its impact on oil supply is limited for now.
Meanwhile, the risk of OPEC’s possible renewed production increase from June will help limit the rise. The forecast for Brent to consolidate at 90 USD/barrel by the end of this year is maintained.
