Oil prices edged higher in early Asian trade on Wednesday amid uncertainty about global demand persisting after US crude inventories reportedly extended their build to last week.
August contract Brent crude oil futures rose 0.45% to $85.39 per barrel, following a 0.10% fall earlier in the session to $84.90 per barrel. The US West Texas Intermediate (WTI) crude futures for delivery the same month gained 0.49% to $81.23 per barrel, having lost 0.10% at $80.78 per barrel earlier.
Prices have weakened in recent sessions as slight profit-taking occurred in the markets due to possible supply disruptions from the ongoing wars in Europe and the Middle East.
Still, the global and US oil benchmarks have remained resilient in the past two weeks as traders continued to price in the risk premium on escalating geopolitical tensions in Russia, the world’s third-largest oil producer, and the oil-rich region.
Concerns over global demand showed no signs of abating on Wednesday, as the American Petroleum Institute (API) reportedly showed that US crude stockpiles unexpectedly climbed 914,000 barrels in the week ending June 21.
The report followed a 2.3 million barrel (mb) surge posted the previous week and added to views of slowing fuel demand in the top oil-consuming nation despite expectations of stronger gasoline demand in the summer travel season.
US gasoline demand is seen picking up over the Fourth of July holiday, with the American Automobile Association (AAA) estimating 70.9 million travelers driving 50 miles (80 kilometers) or more from home from June 29 to July 7, marking a 4.8% rise from a year ago.
Market sources briefed on the API data said gasoline stocks in the country surged 3.84 mb last week, contrasting the 1 mb slide analysts projected.
The potential travel boom may provide comfort to traders anticipating a tighter US oil market this season due to higher fuel demand. Increased US oil consumption might also help ease worries about weakening demand overseas, particularly in China.
Weekly inventory data from the Energy Information Administration (EIA) will be published later Wednesday. For the week ending November 22, analysts expect the EIA to present a 418,000-barrel draw in crude stocks.
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