Oil prices increased on Wednesday due to robust demand in the US, the world’s biggest crude consumer, growing confidence that the US economy could avoid recession and the ongoing conflicts in the Middle East.
The international oil benchmark of Brent crude increased by 0.11% to $71.11 per barrel at 10.49 am local time (0749 GMT), up from the previous session’s close of $71.03.
The US benchmark West Texas Intermediate also rose by 0.23% to $67.49 per barrel, compared to $67.33 at the prior session’s close.
The American Petroleum Institute (API) reported late Tuesday that US commercial crude oil inventories decreased by 573,000 barrels, surpassing market expectations of a 2.3 million barrel rise.
The drop in crude reserves reflected market perceptions of strengthening domestic demand, supporting upward price movements.
Official figures from the Energy Information Administration (EIA) are scheduled for later in the day. If a fall in crude oil inventories is confirmed, prices are likely to climb further.
Meanwhile, US growth and private sector employment data, which will be released this week, are expected to give insight into the pace of interest rate cuts by the US Federal Reserve (Fed).
While it is considered certain that the Fed will reduce the policy rate by 25 basis points next month, the predictions that the bank will make another rate cut in December are at the level of 74%.
Growth in economic activity is expected to positively affect oil demand in the country.
Moreover, Israel’s ongoing attacks in the Middle East, where most of the world’s oil resources are located, supported upward price movements.
According to Lebanon’s official news agency NNA, Israeli jets targeted an apartment building near the city of Sidon, specifically in Haret Saida, and emergency services sent ambulances to the scene.
NNA also reported a second strike in Haret Saida, targeting an empty apartment near the city’s border, with additional ambulances sent to the area.
