Oil climbed 1% after US crude inventories signaled a tightening in supply.


Oil prices rose at the start of Asian trade on Wednesday after industry data showed a reduction in crude oil and fuel inventories in the United States, increasing supply worries and offsetting concerns over the market. slowdown in demand from the main importer, China.

Brent crude oil futures rose 89 cents, or 0.9%, to $105.86 a barrel 0223 GMT. West Texas Intermediate crude oil futures rose 97 cents, or 1%, to $103.38 a barrel.

The gains are the result of Tuesday’s news that the European Union is working on new sanctions against Russia for waging war in Ukraine, sanctions that will target Moscow’s oil industry.

European Commission President Ursula von der Leyen is expected to outline those plans on Wednesday, officials say.

In the United States, crude and fuel inventories fell last week, according to market sources citing figures from the American Petroleum Institute. Crude inventories fell by 3.5 million barrels for the week ending April 29, the sources said, more than the 800,000 barrel drop expected in a Reuters poll.

“The API report made people stop worrying about the demand side and start worrying about the supply side again,” said Phil Flynn, an analyst at Price Futures Group.

US government inventory data is due on Wednesday.

In the prior session, demand concerns stemming from prolonged COVID-19 lockdowns in China that curtailed travel plans during the Labor Day holiday drove prices down by more than 2%.

The global manufacturing PMI index contracted in April for the first time since June 2020, with China’s lockdowns a key factor, said in a statement Caroline Bain, chief commodities economist at Capital. Economics.

“The big picture is clearly negative for demand for commodities,” she said, adding that rising inflation and higher interest rates are starting to weigh on spending.

“While supply constraints may keep commodity prices high for some time to come, we believe subdued demand will weigh on most prices later this year and into 2023,” Ms. Bain said.

The Organization of the Petroleum Exporting Countries and its allies are expected to stick to their policy of another monthly increase in production on Thursday, although the group, known as OPEC+, fell short of its targets production between October and March, except in February.



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