Oil prices boost gains in hopes of demand picking up in China
Oil prices extended gains on Wednesday in hopes of demand getting boosted as China gradually loosens some of its tight COVID-19 measures.
Brent crude futures were up 48 cents, or 0.4%, at $112.41 a barrel at 0410 GMT. West Texas Intermediate (WTI) crude futures climbed 93 cents, or 0.8%, to $113.33 a barrel, paring some losses after oil prices fell by around 2% in the previous session.
Beyond the near term, a number of developments are expected in the form of more positive news about China, much higher oil demand, and prices, which is positive for producers but not for consumer sentiment.
Citing Tuesday's figures from the American Petroleum Institute (API), market sources said U.S. crude oil and gasoline inventories fell last week. EIA, US official government data will be released today.
Rising diesel and distillate prices, along with tight crude stocks, are supporting WTI and will limit the oil price decline in the next few sessions.
Pressure is still on prices despite reports that the US has allowed Chevron Corp to negotiate oil licenses with Venezuela's national producer and has temporarily lifted the US ban. The proposed changes could ultimately help more crude enter the market.
The European Union's failure to persuade Hungary on Monday to lift its veto on the proposed embargo on Russian oil further weighed on the market. Diplomats point to the May 30-31 summit now as the time to agree on a phased ban.
Jerome Powell pledged on Tuesday that the central bank would raise interest rates as needed to quell the rise in inflation, which he said was threatening the economy's foundation.
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