Oil recoups some losses due to U.S. fuel demand

Oil prices rose on Wednesday as industry data showed U.S. fuel stocks fell more than expected. It recovers slightly from a 5 percent drop on Tuesday on fears fuel demand will suffer as China steps up Covid-19 curbs and central banks hike interest rates.

U.S. West Texas Intermediate (WTI) crude futures inched up 64 cents to $92.28 a barrel at 0012 GMT, after sliding $5.37 in the previous session driven by recession fears.

Brent crude futures jumped 48 cents, or 0.5 percent to $99.79 a barrel, trimming Tuesday’s $5.78 loss. The October contract expires on Wednesday. The more active November contract was up 61 cents, or 0.6 percent at $98.45 a barrel.

Gasoline inventories fell by about 3.4 million barrels, while distillate stocks, which include diesel and jet fuel, fell by about 1.7 million barrels for the week ended Aug. 26, according to Data from the American Petroleum Institute (API).

The drawdown in gasoline inventories reached nearly triple the 1.2 million barrel drop that eight analysts polled by Reuters had expected on average. For distillate inventories they had expected a drop of about 1 million barrels.

However, API data informed crude stocks rose by about 593,000 barrels, against analysts’ estimates of a drop of around 1.5 million barrels.

“Worsening outbreaks of Covid-19 in China are also impacting sentiment,” ANZ Research analysts stated.