Oil prices edged higher on Wednesday, rebounding from early losses after U.S. crude stockpiles unexpectedly fell and inventories at the nation’s largest storage site hit their lowest level in three years.
Brent crude futures rose 74 cents, or 0.87%, to $85.82 a barrel, lingering close to multi-year highs.
November U.S. West Texas Intermediate (WTI) crude, which expires on Wednesday, settled 1.1% higher at $83.87 per barrel.
The market had softened overnight after the Chinese government stepped up efforts to tame record high coal prices and ensure coal mines operate at full capacity as Beijing moved to ease a power shortage. Oil prices have in part been swept up in surging natural gas and coal prices worldwide in anticipation that power generators may switch to oil to provide electricity.
U.S. crude stocks fell by 431,000 barrels in the most recent week, the U.S. Energy Information Administration said, against expectations for an increase, and gasoline stocks plunged by more than 5 million barrels as refiners cut processing due to maintenance.
U.S. stocks at the Cushing, Oklahoma delivery hub hit their lowest level since October 2018. Gasoline stocks are now at their lowest since November 2019, the EIA said.
Crude markets in general remain supported on the back of a global coal and gas crunch, which has driven a switch to diesel and fuel oil for power generation.
Reference: CNBC
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