Oil rose on Wednesday after falling to $100 for the first time since April
Oil rallied on Wednesday, a day after prices fell to $100 a barrel for the first time since April, but gains remained limited, cautiously ahead of US inflation data that could weaken the market.
Brent crude futures rose 45 cents, or 0.5%, to $99.97 a barrel at 0630 GMT. West Texas Intermediate (WTI) crude rose 44 cents, or 0.5%, to $95.27.
Investors sold their oil positions to curb inflation, fearing that aggressive rate hikes would sharply slow economic activity and hit oil demand. Prices fell more than 7% in volatile trading on Tuesday.
Another concern is that increases in US interest rates will push the dollar higher and at the same time undermine oil prices. A stronger dollar will make oil more expensive for holders of other currencies, putting downward pressure on demand.
Fears of the persistent recession continue to hit the market, while the strength of the USD and the escalation in Covid cases in parts of China are weighing on prices.
Hot US consumer price index data will be released later on Wednesday. Economists expect the figures to show US inflation accelerating to 1.1% monthly and 8.8% annually.
Renewed COVID-19 travel restrictions in China also weighed on the market. Some cities in the world's second-largest economy have adopted new restrictions, from business shutdowns to wider lockdowns to rein in new infections from a highly contagious subtype of the virus.
U.S. crude inventories increased by about 4.8 million barrels in the week ended July 8. Gasoline inventories increased by 3 million barrels, while distillate stocks rose by about 3.3 million barrels, data based on the American Petroleum Institute (API) figures on Tuesday.
Meanwhile, the market is closely watching Joe Biden's visit to the Middle East, where he will ask Saudi Arabia and other Gulf producers to increase oil production to stabilize prices.
In its monthly report released on Tuesday, OPEC predicts that global oil demand will increase in 2023 and the market will remain tight. It predicts that an additional 900,000 barrels of oil will be needed from its members in 2023 to stabilize the market.
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