Oil prices climbed in Asian trade on Wednesday amid inventory data from the American Petroleum Institute (API) presenting two different results, while fears over a US recession and demand concerns continued to cap price gains.
Global benchmark Brent crude oil futures for October delivery rose 0.44% to $76.82 per barrel, while the US West Texas Intermediate (WTI) crude futures were up 0.56% to $73.61 per barrel.
Traders remained on the watch for updates on Middle East tensions, of which the risk of an all-out war has bolstered oil prices in recent sessions.
Hezbollah Secretary General Sayyed Hassan Nasrallah vowed on Tuesday a “strong and effective” response to the assassination of their senior commander Fuad Shukr in an alleged Israeli airstrike in Beirut last week.
Palestinian military group Hamas might also be planning to retaliate against Israel for the death of their political leader, Ismail Haniyeh.
Crude prices have incurred near seven-month declines this week as prospects of a US recession introduced the possibility of weaker oil demand in the coming months.
Such a scenario was further supported by several US economic data that missed expectations, with nonfarm payrolls sharply falling, unemployment rising in July, and manufacturing activity contracting in the month.
The issue came amid oil facing a softer demand outlook at a time when there are increased views for a 2025 market surplus.
API Inventory Comes In Mixed as Gasoline Stocks Surge
US oil inventories ended mixed in the earlier week, with the API reporting crude stocks in the country jumping about 180,000 barrels in the week ending August 2, compared to the forecast for an 850,000-barrel build.
On the other hand, gasoline stockpiles grew by 3.31 million barrels. Distillates, which include diesel and heating oil, also rose by 1.22 million barrels.
The increase pointed towards easing travel demand as the summer’s peak season nears the end, a period when refiners often start reducing activity in preparation for maintenance in the fall.
The travel-heavy summer season has significantly shored up fuel demand, but that surge is now expected to turn around.
Official inventory data from the Energy Information Administration (EIA) will be released later in the day, which is forecast to show a draw of 1.60 million barrels in the week ending August 7.
The agency sees a tighter US oil market this year, estimating global oil consumption climbing 1.1 million barrels per day (bpd) year-over-year (YoY) to 102.9 million bpd. It also revised estimates for 2024 US oil demand, anticipating demand in the top consumer to reach 20.5 million bpd.
