Oil prices inched higher on Wednesday as data showing a larger-than-expected U.S. crude drawdown last week outweighed concerns about lower fuel demand from China amid tightening COVID-19 curbs.
Brent crude futures rose 27 cents, or 0.3%, to $88.63 a barrel while U.S. West Texas Intermediate (WTI) crude futures gained 25 cents, or 0.3%, to $81.20 a barrel.
Both benchmark contracts rose about 1% on Tuesday as the United Arab Emirates, Kuwait, Iraq and Algeria reinforced comments from Saudi Arabia’s energy minister that the Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, were not considering boosting oil output. OPEC+ next meets to review output on Dec. 4.
U.S. crude inventories fell by about 4.8 million barrels for the week ended Nov. 18, data from the American Petroleum Institute showed, according to market sources.
Distillate stocks, which include heating oil and jet fuel, rose by about 1.1 million barrels compared with analysts’ expectations for a drop of 600,000 barrels.
Uncertainty over how Russia will respond to plans by the Group of Seven (G7) nations to cap Russian oil prices also provided some support to the market.
The price cap is due to be announced soon, a senior U.S. Treasury official said on Tuesday, adding that it will probably be adjusted a few times a year.
Late on Tuesday, financial hub Shanghai tightened rules for people entering the city while Beijing shut parks and museums.