Oil prices rose for the fifth day in a row amid signs of another large drawdown in US stockpiles, as the strength of the broader markets improved.
West Texas Intermediate crude climbed near $82 a barrel, and is on its way to achieve the longest streak of gains since last March. US inventories also fell by 11.5 million barrels, according to the oil industry-funded American Petroleum Institute.
If official data to be published later on Wednesday confirms the decline in US inventories, it would be their sixth decline in seven weeks.
A broad recovery in the oil market
More broadly, markets outside the United States boomed as China prepared to unveil new stimulus packages, and investors speculated that the US Federal Reserve might raise interest rates again, offsetting the negative impact from signs of increased crude supplies from Russia, after seaborne inflows from The country, a member of the OPEC + alliance, reached its highest level in 8 weeks.
After the latest series of daily gains for oil, prices on the New York Stock Exchange are now trading at somewhat higher levels than they were at the beginning of the year, with marked price differences according to contract durations, indicating an increasing decline in market supply.
Citigroup: OPEC needs to deepen oil production cuts
Crude oil prices got a boost from Saudi Arabia's supply cuts, as Riyadh implemented a large voluntary supply cut in hopes of rebalancing the global market after a weak first half of 2023.
Data affecting the price of oil
Investors focus on key data expected from the world's two largest economies, including growth indicators in the United States on Wednesday and manufacturing in China on Thursday, as these data highlight the strength of the global economy, in addition to its impact on energy consumption expectations.
Yip Jun Rong, market strategist at IG Asia, believes that there are still some concerns about the PMI data in China, expecting this data to highlight again the weak demand outlook, which in turn may put pressure on oil prices.
Is China's economic stimulus alone enough to support oil prices?
Nevertheless, widely followed market indicators point to a positive outlook. The price difference between the two nearest contracts for Brent crude for December delivery is close to $5 a barrel upon delay, which constitutes an increase compared to less than $2 a barrel nearly two months ago.
