Singapore, April 26 (BNA): Oil rose after falling more than 2% in the previous session as reports of falling crude oil and fuel inventories in the United States refocused investors on strong demand in the world’s largest oil consumer.
Brent crude jumped 30 cents, or 0.4 percent, to $81.07 a barrel by 0358 GMT.
US West Texas Intermediate crude rose 39 cents, or 0.5%, to $77.46 a barrel, Reuters reported.
US crude oil inventories fell by about 6.1 million barrels in the week ending April 21, according to market sources citing figures from the American Petroleum Institute.
Analysts had expected crude stocks to drop by about 1.5 million barrels.
The sources said that gasoline stocks fell by 1.9 million barrels last week, while distillate stocks rose by 1.7 million barrels.
Oil prices fell more than 2%, back to about the same level before the Organization of the Petroleum Exporting Countries (OPEC) and other producer allies such as Russia, known as OPEC+, announced an additional production cut in early April.
The upward momentum generated by the OPEC cuts is running out, and Russia’s oil exports have not shown any obvious decline, leaving the supply side without further support, Song Yang, an analyst at China Galaxy Futures, said in a note.
While the API data pushed the market higher, persistent economic concerns and expectations of higher interest rates that could dampen fuel demand growth counter signs of improving consumption gains in the short term.
US consumer confidence fell to a nine-month low in April as concerns about the future mounted, raising the risk of the economy falling into recession this year.
Yeap Jun Rong, a market analyst with IG, said
On a note to customers.
The market is watching uncertainty over any fallout from First Republic Bank (FRC.N) which on Monday announced a flight in deposits of more than $100 billion, raising fears of a possible banking crisis that could affect the US economy.
Investors also expressed concern that possible new interest rate hikes by central banks fighting inflation could slow economic growth and weaken energy demand in the United States, Britain and the European Union.
The US Federal Reserve, the Bank of England and the European Central Bank are expected to raise interest rates at their next meetings.
NAA