Oil prices appreciated slightly on Wednesday following an unexpected decline in U.S. crude oil inventories that offset concerns about rising COVID-19 cases in China, the world’s largest importer of the commodity.
Brent crude oil rose 8 cents, or 0.1%, to $80.07 per barrel, while U.S. West Texas Intermediate (WTI) crude oil fell 1 cent to $76.22 a barrel.
U.S. crude inventories fell by about 3.1 million barrels in the week to Dec. 16, according to market sources citing data from the American Petroleum Institute, while nine analysts polled by Reuters had estimated a 1.7 million barrel drop in stocks.
Gasoline inventories rose by about 4.5 million barrels, while distillate stocks rose by 828,000 barrels, according to the sources, who spoke on condition of anonymity.
“A larger-than-expected draw in U.S. inventories, coupled with U.S. plans to refill their Strategic Petroleum Reserve have supported oil prices,” said Serena Huang, head of APAC analysis at Vortexa.
“But optimism has been capped by downside pressures from rising global economic headwinds and the recent surge in China’s COVID cases,” Huang added.
Meanwhile, Saudi energy minister Prince Abdulaziz bin Salman said in an interview with the Saudi state news agency that OPEC+ members leave politics out of the decision-making process and out of their assessments and forecasting.
The minister added that the OPEC+ decision to cut oil output, which was heavily criticised, turned out to be the right one for supporting the stability of the market and the industry.
Oil prices were boosted by these comments which suggest that OPEC+ may continue to keep supply tight to support oil prices, CMC Markets analyst Tina Teng said.
Growing worries about a surge in COVID-19 cases in China as the country begins dismantling its strict zero-COVID policy kept oil prices from moving higher.
The country’s approach had kept infections and deaths comparatively low among the 1.4 billion-strong population, but the World Health Organization has labelled it not “sustainable” this year due to concerns over its impact on citizens’ lives and the nation’s economy.
China’s crude oil imports from Russia in November rose 17%from a year earlier, as Chinese refiners rushed to secure more cargoes ahead of a price cap imposed by the Group of Seven nations on Dec. 5.
The increase made Russia the top oil supplier for China ahead of Saudi Arabia.