Oil prices rose in Asian trade on Wednesday as markets considered weaker demand indicators from the largest importer China and the possibility of further US rate hikes amid possible supply tightness.
Brent crude rose 15 cents, or 0.2%, to $84.18 a barrel as of 06:00 GMT, while West Texas Intermediate (WTI) crude was up 17 cents, or 0.2%, to $79.81 a barrel.
Both indicators lost about 0.5% on Tuesday.
Markets, Federal Reserve officials, and policymakers from the European Central Bank, Bank of England, and the Bank of Japan await tips concerning interest rates ahead of the annual meeting in Jackson Hole, Wyoming this weekend.
Investors are reluctant to take big positions ahead of the Jackson Hole symposium as they want to have some clues about the US Federal Reserve’s next move.
China, the world’s second-largest economy, is vital to supporting oil demand for the remainder of the year. Weak growth markets disappointed. The promised incentive fell short of expectations.
Concerns over high-interest rates and sluggish demand in China are expected to outweigh supply tightening by OPEC+ in the short term. Supply cuts made when demand falls remain ineffective in supporting prices.
As part of an agreement between Organization of Petroleum Exporting Countries members and their allies to cut supply and boost prices, Saudi Arabia has volunteered to cut production by an additional 1 million barrels per day (bpd) from July to September. In Russia, it plans to reduce exports by 500,000 barrels per day in August.
U.S. crude inventories continued to fall, falling by nearly 2.4 million barrels in the week ended Aug. This was a slightly smaller drop than the 2.9 million barrels analysts had been expecting.
After a massive 6.2 million barrel drop a week ago, overall supply conditions remain tight.
The weekly report from the Energy Information Administration (EIA), the statistical arm of the US energy department, will be released on Wednesday at 14:30 GMT.