Oil prices were largely unchanged in early Asian trade on Wednesday as hopes for higher demand in the developing world and supply cuts by the world’s biggest oil exporters offset fears of an economic downturn driving up U.S. crude stockpiles.
Keeping a lid on prices, U.S. crude inventories rose by about 3 million barrels in the week to July 7, according to market sources citing American Petroleum Institute industry figures. Analysts polled by Reuters had expected a 500,000 barrel rise in crude stocks.
If confirmed in data from the Energy Information Administration later on Wednesday, it would be the first crude stock build in four weeks and compares with an increase of 3.3 million barrels in the same week last year and a five-year average decrease of 6.9 million barrels.
In the previous session, oil rose about 2%, boosted by a falling U.S. dollar and forecasts for global demand for petroleum to increase.
The International Energy Agency, or IEA, said the oil market should remain tight in the second half of 2023, citing strong demand from China and developing countries combined with recently announced supply cuts, including by top exporters Saudi Arabia and Russia.
At the same time, the U.S. EIA on Tuesday projected demand would outpace supply by 100,000 barrels per day, or bpd, in 2023 and by 200,000 bpd in 2024.
Markets were awaiting U.S. inflation data on Wednesday for clues on the interest rate outlook. Higher rates can slow economic growth and reduce oil demand.