Oil prices rose in Asian trade on Wednesday, recouping some recent losses as industry data showed a surprise draw in U.S. oil inventories.
But prices were nursing a tumble to two-month lows this week, amid growing concerns that a cooling global economic growth will dent oil demand in the coming months.
Sentiment towards crude was also dented by the prospect of more U.S. trade tariffs, amid continued threats from President Donald Trump.
Brent oil futures expiring in April rose 0.3% to $73.27 a barrel, while West Texas Intermediate crude futures rose 0.4% to $69.17 a barrel by 20:38 ET (01:38 GMT). Both contracts shed about $2 on Tuesday, following weak economic prints from the U.S. and Germany.
US oil inventories clock small weekly draw- API
Data from the American Petroleum Institute showed on Tuesday evening that U.S. oil inventories shrank by 0.6 million barrels in the week to February 21, against expectations for a build of 2.3 mb.
The print usually heralds a similar reading from official inventory data, which is due later on Wednesday. But signs of an unexpected draw spurred some hopes for tighter U.S. supplies in the near-term.
The API data offered some relief to oil prices, although they were nursing steep losses so far in 2024 amid growing jitters over increased supplies and softening demand.
Trump tariff threats, economic jitters rattle oil
Oil prices were nursing a tumble to two-month lows after weak economic data from the U.S. and Germany ramped up concerns over slowing demand.
U.S. consumer confidence appeared to have worsened in February, furthering concerns over slower private spending in the country, which is a major economic driver.
The data was preceded by data showing a sustained contraction in Germany’s gross domestic product, as Europe’s largest economy cooled further.
Traders were also grappling with threats of more trade tariffs under Trump, which stand to potentially destabilize global trade and dent the economy, which in turn could hurt oil demand.
Major oil importer China has been a key target of Trump’s tariffs, which could pressure the country’s economy and stymie its appetite for crude.
Trump this week flagged potential tariffs on copper, and said his tariffs on Mexico and Canada are set to take effect next week.
Focus this week is also on more economic cues, with U.S. fourth-quarter GDP data due on Thursday. PCE price index data- the Federal Reserve’s preferred inflation gauge- is due on Friday, as is German inflation data.
