Oil prices rose on Wednesday after U.S. data showed that crude stockpiles fell dramatically, indicating an improvement in the country's demand situation, while major central banks' hawkish stance in taming rising inflation limited increases.
International benchmark Brent crude traded at $81.16 per barrel at 10.14 a.m. local time (0714 GMT), a 0.69% increase from the closing price of $80.60 a barrel in the previous trading session.
Concurrently, the American benchmark West Texas Intermediate (WTI) traded at $77.69 per barrel, up 0.80% from the previous session's close of $77.07 per barrel.
Late Tuesday, the American Petroleum Institute (API) announced its estimate of a fall of 6.08 million barrels in U.S. crude oil inventories relative to the market expectation of a 1.66 million-barrel drop.
If crude stocks fall in line with the API's expectations, it signals a rebound in crude demand in the U.S., the world's largest oil consumer, to positively support prices.
The U.S. Energy Information Administration's (EIA) data on oil stocks will be announced later on Wednesday, and if the decline in stock levels is confirmed, prices are expected to continue rising.
Meanwhile, the U.S. dollar index eased, making crude oil less expensive for overseas buyers.
However, due to weak economic data, prices fell nearly 2% in early trading, with U.S. consumer confidence in April falling to its lowest level since July 2022, according to Daniel Hynes, a commodity strategist at Australia and New Zealand Banking Group.
"The lack of a strong signal from fundamental data has seen investors with a short-term focus dominate trading," Hynes said, adding that a slump in oil refining margins is also weighing on sentiment.
Fears that the U.S. Fed will continue raising interest rates along with other countries also weighed on prices and limited further price increases.
The Fed is predominantly expected to raise rates by 25 basis points on May 3 as the U.S. labor market remains tight and inflation remains elevated.
