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But
the likelihood that OPEC+ will leave output unchanged at its
upcoming meeting limited the gains.
Brent crude futures rose $2.06, or 2.48% to $85.09 per barrel by
1044 GMT. The more active February Brent crude contract rose by
2.02% to $85.95.
U.S. West Texas Intermediate (WTI) crude futures climbed $1.69,
or 2.16%, to $79.89.
Support followed expectations of tighter crude supply.
U.S. crude oil stocks dropped by 7.9 million barrels in the week
ended Nov. 25, according to market sources citing American
Petroleum Institute figures on Tuesday. [API/S]
Official figures are due from the U.S Energy Information
Administration on Wednesday. [EIA/S]
And the International Energy Agency expects Russian crude
production to be curtailed by some 2 million barrels of oil per
day by the end of the first quarter next year, its chief Fatih
Birol told Reuters on Tuesday.
On the demand side, further support came from optimism over a
demand recovery in China, the world's largest crude buyer.
China reported fewer COVID-19 infections than on Tuesday, while
the market speculated that weekend protests could prompt an
easing in travel restrictions.
Guangzhou, a southern city, relaxed COVID prevention rules in
several districts on Wednesday.
A fall in the U.S. dollar was also bearish for prices. A weaker
greenback makes dollar-denominated oil contracts cheaper for
holders of other currencies, and boosts demand.
Fed Chair Jerome Powell is scheduled to speak about the economy
and labour market on Wednesday, with investors looking for clues
about when the Fed will slow the pace of its aggressive interest
rate hikes.
Capping gains, the OPEC+ decision to hold its Dec. 4 meeting
virtually signals little likelihood of a policy change, a source
with direct knowledge of the matter told Reuters on Wednesday.
"Market fundamentals favour another cut, especially given the
uncertainty over China's COVID situation ... Failure to do so
risks sparking another selling frenzy," said Stephen Brennock of
oil broker PVM.
(Reporting by Rowena Edwards, additional reporting by Laila
Kearney in New York and Trixie Yap in Singapore; Editing by
Louise Heavens)
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