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In
an indication of healthy demand, U.S. crude oil and fuel
inventories fell last week, according to market sources citing
American Petroleum Institute figures ahead of Wednesday's
official U.S. inventory report.
Brent futures for May rose 83 cents, or 1%, to $82.75 a barrel
by 0922 GMT. U.S. West Texas Intermediate crude for April gained
59 cents, or 0.8%, to $78.15.
"With envisaged global stock draws in the second quarter and
possibly beyond, heightened geopolitical tension with palpable
impact on supply and the approaching rate cuts that will make
borrowing and even oil trading cheaper, it is almost beyond
comprehension as to why the market is reluctant to break
higher," said Tamas Varga of oil broker PVM.
Oil had fallen on Tuesday after a higher than expected forecast
for U.S. crude oil production and bearish economic data, but
persistent geopolitical tensions limited declines.
In an earlier sign of strong demand, the Organization of the
Petroleum Exporting Countries on Tuesday stuck to its forecast
for oil demand growth of 2.25 million barrels per day (bpd) in
2024, higher than many other forecasts.
The International Energy Agency, which expects demand growth to
be much lower, updates its forecasts on Thursday.
Oil and the wider financial markets also found support from
sentiment that slightly hotter than expected U.S. inflation will
not derail interest rate cuts by the middle of the year. Lower
rates support oil demand.
"The risk environment has largely stayed unfazed, riding on the
firm belief that current market pricing for a rate cut only in
June will do the job," said IG market strategist Yeap Jun Rong.
The unexpected slide in U.S. crude inventories and strong growth
forecasts by OPEC also supported prices, said Yeap.
In a note to clients, Capital Economics analysts said they still
forecast the Fed to start easing policy "around June".
(Reporting by Alex LawlerAdditional reporting by Katya Golubkova
in Tokyo and Jeslyn Lerh in SingaporeEditing by David Goodman)
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