Oil prices rise over anticipated decline in US crude inventories

By Sibel Morrow

ANKARA (AA) – Oil prices increased on Wednesday over signs of improved demand in the US, while rising COVID-19 cases in China limited further upticks.

International benchmark Brent crude traded at $84.69 per barrel at 10.14 a.m. local time (0714 GMT), up 0.52% from the closing price of $84.25 a barrel in the previous trading session.

At the same time, American benchmark West Texas Intermediate (WTI) traded at $78.59 per barrel, a 0.50% gain after the previous session closed at $78.20 a barrel.

Expectations of a hefty drop in US crude oil inventories were the main driver for upward price movements.

Late Tuesday, the American Petroleum Institute (API) announced its estimate of a fall of 7.8 million barrels in US crude oil inventories, relative to the market expectation of a decline of 2.5 million barrels.

A strong inventory decrease implies an uptick in crude demand in the US, assuaging market concerns over falling demand.

The US Energy Information Administration (EIA) will release official oil stock data later Wednesday, and if the decrease in stock levels is confirmed, prices are expected to rise further.

However, ongoing civil unrest in China sparked by the country's restrictive COVID-19 lockdowns is limiting further upticks.

Protests against China's "Zero COVID" policies began Saturday in several cities across the country, including Shanghai, where police used pepper spray to block hundreds of demonstrators who had gathered at Middle Urumqi Road at midnight, the South China Morning Post daily reported.

Industrial data from the world's second-largest oil-consuming country signaled weaker demand, putting a damper on rising oil prices.

China's official manufacturing purchasing managers' index (PMI) decreased from 49.2 in October to 48 in November.