Oil climbs on forecast mammoth drop in US stocks

By Sibel Morrow

Crude oil prices rebounded on Wednesday after estimates of a massive weekly drop in US crude inventories, while prospects of another OPEC+ production cut also boosted prices ahead of the group's meeting on Friday.

International benchmark Brent crude traded at $85.64 per barrel at 10.08 a.m. local time (0708 GMT), a 0.86% gain from the closing price on Tuesday of $84.91 per barrel.

The American benchmark West Texas Intermediate (WTI) traded at the same time at $82.06 per barrel, up 0.85% from the session close of $81.37 per barrel on Tuesday.

Investor risk appetite was constrained after Fitch cut the US’ credit rating, citing fiscal deterioration, but a big plummet in US commercial crude oil stockpiles mitigated concerns, as a robust stockpile draw signals solid oil demand in the world's top oil-consuming economy.

Inventories are estimated to contract by around 15.4 million barrels, higher than the market forecast of a drop of 900,000 barrels.

However, demand in China is still on investors’ watch lists as the country tries to recover from pandemic-era demand weakness.

Analysts say worrisome economic data from China may lead to another output cut decision by the OPEC+ group during its meeting on Friday.