Oil remains calm as we await more inventory data on weaker dollar movements and demand trends
Oil prices were little changed on Wednesday as the dollar weakened and investors awaited more inventory data for clues on demand trends.
Brent crude futures rose one cent to $83.70 a barrel at 0405 GMT, after gaining 3.3% in the previous session.
West Texas Intermediate (WTI) crude futures rose 15 cents to $77.29 after rising 4.1% in the previous session.
Federal Reserve Chairman Jerome Powell is expected to remain supportive after his less hawkish speech on interest rates than markets expected.
The risk sentiment and the weak US dollar after the Fed's comments seem to be used for some increase in oil prices, having underperformed since the end of January.
The dollar index fell slightly on Wednesday. Extended the losses after Powell's comments on Tuesday, making oil cheaper for those holding other currencies.
By the way, the overnight bearish reaction in the US dollar is more restrained than before, and a continued recovery in the dollar could act as a headwind for oil prices.
With less aggressive rate hikes in the United States, the market hopes that the world's largest economy and oil consumer will be able to avoid a decline in oil demand by avoiding a sharp slowdown in economic activity or even a recession.
While it seems unlikely, if stronger-than-expected growth comes from developing countries, oil prices will be stronger and OPEC+ will have to increase production.
Weekly inventory data from the American Petroleum Institute (API) industry group supports the market. In the week ending February 3, crude oil inventories decreased by about 2.2 million barrels.
This is data contrary to the expectations of analysts who estimate that crude oil inventories have increased by 2.5 million barrels. However, gasoline stocks increased by about 5.3 million barrels, and distillate stocks, which include diesel and heating oil, increased by about 1.1 million barrels.
The market will want to see if the US Energy Information Administration's (EIA) data to be released today confirms the decline in crude oil inventories.
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