Oil Prices Edge Higher as U.S. Stockpile Drop Offsets Supply Concerns

Oil prices climbed in early Asian trading hours on Wednesday, rebounding from two-month lows in the prior session after an industry report showed a decline in U.S. crude stockpiles.

Brent crude oil futures rose 27 cents, or 0.4%, to $73.29 a barrel by 0134 GMT, while U.S. West Texas Intermediate (WTI) crude oil futures gained 25 cents, or 0.4%, to $69.18 per barrel.

Market sources cited data from the American Petroleum Institute (API) indicating that U.S. crude stocks fell by 640,000 barrels in the week ended February 21. Official stockpile data from the U.S. government is expected later on Wednesday. Analysts polled by Reuters had projected a 2.6-million-barrel increase in U.S. crude inventories.

The decline in stockpiles helped ease concerns over rising global oil supply, which, coupled with weak economic data from the U.S. and Germany, had pushed oil prices more than 2% lower on Tuesday. Brent crude settled at its lowest level since December 23, while WTI recorded its weakest close since December 10.

U.S. economic data showed consumer confidence in February deteriorated at its sharpest pace in three and a half years, with inflation expectations rising over the next 12 months. In Germany, the economy contracted in the final quarter of 2024 compared to the previous quarter.

Oil markets remain wary of the impact of U.S. trade policies, particularly President Donald Trump’s decisions on tariffs against China and other trading partners, which could add pressure to the American economy.

Despite fresh U.S. sanctions on Iran that could reduce the country's crude exports by up to 1 million barrels per day, OPEC+ members are preparing to increase supply in the coming months, according to Commodity Context analyst Rory Johnston.

Meanwhile, the U.S. and Ukraine have agreed on terms for a draft minerals deal central to Trump's efforts to expedite the end of the war in Ukraine, sources familiar with the matter told Reuters. A resolution to the conflict could potentially pave the way for increased Russian oil exports to the market.

Follow Emirates 24|7 on Google News.