Oil prices in Asia increased on Wednesday, continuing their rise after industry data revealed a larger-than-expected decrease in U.S. inventories over the past week.
However, the gains in crude were tempered by anticipation surrounding important U.S. inflation figures and the conclusion of a Federal Reserve meeting scheduled later in the day.
Brent oil futures for August delivery climbed 0.2% to reach $82.09 per barrel, while West Texas Intermediate crude futures rose 0.3% to $77.79 per barrel as of 20:53 ET (00:53 GMT).
According to the American Petroleum Institute (API), U.S. oil inventories declined by 2.4 million barrels (mb) during the week ending June 7, surpassing expectations of a 1.8 mb drawdown and reversing the previous week's 4 mb build. Gasoline inventories decreased, while distillate stocks showed a slight increase. This data suggests a potential uptick in U.S. fuel consumption as the summer travel season gains momentum, following a somewhat sluggish start.
Typically, API data foreshadows similar findings in official inventory reports, due later on Wednesday.
Oil price gains were restrained ahead of the conclusion of the Federal Reserve's two-day meeting, with market attention focused on any signals regarding future interest rate adjustments, particularly cuts. Recent rate cuts by major central banks, including the European Central Bank earlier in June, have buoyed market expectations for similar moves.
Prior to the Fed's rate decision, investors awaited key U.S. Consumer Price Index (CPI) data for insights into inflation trends in May. Persistent inflation could reduce the Fed's incentive to lower rates. Strong U.S. labor market indicators and steady inflation suggest prolonged high interest rates, potentially dampening global economic growth and oil demand.
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) maintained its optimistic outlook on global oil demand for 2024, reinforcing expectations of a supply deficit in the third quarter due to ongoing output cuts. Market focus now turns to the International Energy Agency's (IEA) forthcoming monthly report, which is anticipated for its perspective on demand trends.
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