Oil prices increased on Wednesday after positive US data which revealed that crude stockpiles fell dramatically, indicating an improvement in the country’s demand situation, while surging fears that major central banks will continue their hawkish stance in taming rising inflation limited further increases.
International benchmark Brent crude traded at $72.73 per barrel at 0756GMT, a 0.30% gain from the closing price of $72.51 a barrel in the previous trading session on Tuesday.
The American benchmark West Texas Intermediate (WTI) traded at the same time at $68.02 per barrel, up 0.47% from the previous session’s close of $67.70 per barrel.
Prices received upward support when the American Petroleum Institute announced late Wednesday an estimated decrease of 2.4 million barrels in US crude oil inventories, more than the market expectation of a 1.4 million-barrel draw.
If crude stocks rise faster than predicted, it indicates less demand and a bearish outlook for crude prices.
The US Energy Information Administration’s data on oil stocks will be announced later on Thursday, and if the decline in stock levels is confirmed, prices are expected to further decline.
Despite recession fears in the US, economic data indicating that the country’s economy has maintained its resilience also bolstered the US demand outlook and supported price increases.
“The market took the view that the better than expected new home sales and durable goods orders is likely to push the Fed to raise rates further at upcoming Federal Open Market Committee meetings,” according to Daniel Hynes, a commodity strategist at Australia and New Zealand Banking Group.
Meanwhile, European Central Bank President Christine Lagarde ruled out the possibility to put an end to interest rate increases anytime soon.
