Surprise Drop in US Crude Stocks Boosts Oil Prices: Middle East Tensions and US Economic Data Influence Markets
Oil prices increased on Wednesday due to a larger-than-expected decrease in US crude inventories, according to industry data.
Brent crude and US West Texas Intermediate futures both rose around 0.3 percent.
The American Petroleum Institute reported a drop of 3.237 million barrels in US crude inventories, while analysts had predicted a rise of 800,000 barrels.
Traders are awaiting official data from the Energy Information Administration for confirmation.
The market is also monitoring tensions in the Middle East.
The US business activity decreased in April to a four-month low, according to S&P Global's flash Composite PMI Output Index.
This index, which measures the manufacturing and services sectors, dropped from 52.1 in March to 50.9 in April.
Analysts believe that this data may persuade policymakers to lower interest rates to boost the economy.
Lower interest rates could lead to increased economic growth and demand for oil from the world's largest consumer.
Despite ongoing conflicts in the Middle East, the impact on oil supplies is currently limited.
Crude oil prices are supported by Middle East risk premium, but any potential increase in OPEC production from June could limit significant price increases.
The text discusses the forecast for Brent crude oil price to stabilize at $90 per barrel by the end of the year, according to Heng.
There have been intense Israeli strikes in Gaza, and both Israel and Iran are reportedly considering the current operations concluded with no further action needed for now.
The US and Europe are preparing to impose new sanctions on Iran, but their impact on oil supply is expected to be minimal in the short term.