Global crude oil news: Surprise drop in US stockpiles leads to a rise in prices

2 Nov 2022 , 08:57 AM

Early trade on Wednesday saw an increase in oil prices after industry data revealed an unexpected reduction in U.S. crude stockpiles, indicating that demand has held up despite significant interest rate hikes that have slowed global growth.

While U.S. West Texas Intermediate (WTI) crude futures increased 26 cents, or 0.3%, to $88.63 a barrel, Brent crude futures gained 17 cents, or 0.1%, to $94.82 a barrel.

Due to the weaker U.S. dollar and an unconfirmed note emerging on social media that claimed the Chinese government would look into methods to reduce COVID laws starting in March 2023, both benchmark contracts increased by around 2% in the previous session.

According to news reports, figures released on Tuesday by the American Petroleum Institute revealed that crude stockpiles decreased by around 6.5 million barrels for the week ending October 28.

At the same time, gasoline inventories decreased more than anticipated, by 2.6 million barrels as opposed to the 1.4 million barrels predicted by analysts.

Because of repeated lockdowns that have slowed growth and reduced oil demand in the second-largest economy in the world, China’s zero-COVID policy has played a significant role in keeping oil prices in check.

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