Oil prices rose on Wednesday over expectations of a strong rebound in demand from China, the world’s largest crude importer, while an expected rise in US crude oil stockpiles limited further price upticks.
International benchmark Brent crude traded at $86.58 per barrel at 09.56 a.m. local time (0656GMT), a 0.52% increase from the closing price of $86.13 a barrel in the previous trading session.
American benchmark West Texas Intermediate (WTI) traded at $80.42 per barrel at the same time, a 0.36% gain after the previous session closed at $80.13 a barrel.
Although long-term lockdowns and strict restrictions restrained China’s economic growth since the beginning of the COVID pandemic, experts are hopeful for an economic rebound as life is gradually normalizing in the world’s second-largest oil consuming country.
Positive sentiment also fuels hopes for strong demand, but concerns over renewed restrictions remain as China’s Lunar New Year holiday which started on Saturday is expected to bring together millions of people.
Limiting further price increases, the American Petroleum Institute (API) reported its estimate of a surge of almost 3.4 million barrels in US crude oil stocks late Tuesday in contrast to the market consensus of a 1.6 million-barrel rise.
A higher-than-expected stockpile increase signals a drop in crude demand, weighing prices down.
The US Energy Information Administration (EIA) will release official oil stock data later Wednesday, and if the estimated build in stock levels is confirmed, prices are expected to fall further.