By Ambar Warrick
Investing.com — Oil prices moved little in early Asian trade on Wednesday, sticking to near one-month highs as markets awaited fresh cues from U.S. inflation data due later in the day, with focus also turning to a potential build in U.S. crude inventories.
Crude prices rallied on Tuesday amid growing hopes that the U.S. Federal Reserve will taper its hawkish stance, while a recent supply cut by the Organization of Petroleum Exporting Countries and allies (OPEC+) continued to provide support.
Data from the showed that U.S. oil inventories unexpectedly grew by about 300,000 barrels in the week to April 7. But this was also in part driven by a 1.6 million barrel draw from the Strategic Petroleum Reserve.
due later in the day is expected to provide more clarity on inventories in the world’s largest oil consumer, with analysts forecasting a 583,000 barrel draw. Inventories have shrunk consistently for the past two weeks, as improving weather conditions across the U.S. spurred increased fuel demand.
The prospect of tighter supplies, especially after the OPEC+ cut, kept the near-term outlook for crude markets upbeat.
futures rose 0.1% to $85.67 a barrel, while futures were flat at $81.55 a barrel by 21:25 ET (01:25 GMT). Both contracts surged 1.6% and 2.2%, respectively, on Tuesday.
Focus is now chiefly on U.S. data due later on Wednesday, which is expected to show more easing in inflation, albeit slightly. While the reading is still expected to remain well above the Fed’s target range, markets are growing more hopeful that the central bank is closer to pausing its rate hike cycle.
But on the other hand, markets also remained wary of any further disruptions to oil demand, especially from slowing economic growth.
Data from China showed that grew much lesser than expected in March, indicating a staggered economic recovery in the world’s largest oil importer.
With a raft of recent economic readings pointing to a sluggish recovery in China, markets are betting that the government will likely roll out more stimulus measures to help support growth.
Focus this week is also on monthly oil market reports from the and the . Both groups expect a recovery in China to drive oil demand to record highs this year.
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