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Moving in and out of negative territory, Brent crude futures
were up 43 cents, or 0.5%, at $80.53 a barrel by 1212 GMT. U.S.
West Texas Intermediate (WTI) crude futures rose 25 cents, or
0.3%, to $75.37 a barrel.
Both contracts rose on Monday and Tuesday, rebounding from a
sharp sell-off in the first week of 2023.
U.S. crude oil stockpiles jumped by 14.9 million barrels in the
week ended Jan. 6, sources said, citing data from the American
Petroleum Institute (API). At the same time, distillate stocks
rose by about 1.1 million barrels.
Analysts polled by Reuters had expected crude stocks to fall.
Traders will be looking out for inventory data from the U.S.
Energy Information Administration typically due 1530 GMT. [EIA/S]
The oil market has been pulled lower by worries that sharply
higher interest rate hikes to tame inflation would trigger a
recession and curtail fuel demand. U.S. inflation data is due on
Thursday.
If inflation comes in below expectations that would drive the
dollar down, analysts said. A weaker dollar can boost oil demand
as it makes the commodity cheaper for buyers holding other
currencies.
Prices have not jumped but gained some support from hopes for
fuel demand growth in China, the world's second-largest oil
consumer after the United States, after it eased its COVID-19
curbs and increased crude import quotas by 20%.
"It is dawning on market players that China’s return to
normality won’t be enough to propel oil back above $100/bbl on a
sustained basis," said PVM analyst Stephen Brennock.
"What is required is an improvement in global growth. Yet the
outlook for the world economy is constrained by high inflation
and tightening credit conditions."
(Additional reporting by Sonali Paul in Melbourne and Trixie Yap
in Singapore; Editing by Elaine Hardcastle)
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