Oil prices edge higher as large U.S. crude stock drop outweighs China demand worries

Oil prices edge higher as large U.S. crude stock drop outweighs China demand worries

SINGAPORE - Oil prices inched higher on Wednesday as data showing a larger-than-expected U.S. crude drawdown last week outweighed concerns about lower fuel demand from China amid tightening COVID-19 curbs.

Brent crude futures rose 27 cents, or 0.3%, to $88.63 a barrel at 0719 GMT, while U.S. West Texas Intermediate (WTI) crude futures gained 25 cents, or 0.3%, to $81.20 a barrel.

Both benchmark contracts rose about 1% on Tuesday as the United Arab Emirates, Kuwait, Iraq and Algeria reinforced comments from Saudi Arabia's energy minister that the Organization of the Petroleum Exporting Countries (OPEC) and allies, together called OPEC+, were not considering boosting oil output. OPEC+ next meets to review output on Dec. 4.

U.S. crude inventories fell by about 4.8 million barrels for the week ended Nov. 18, data from the American Petroleum Institute showed, according to market sources.

Analysts polled by Reuters on average had expected a 1.1 million barrel drawdown in crude inventories.

Distillate stocks, which include heating oil and jet fuel, rose by about 1.1 million barrels compared with analysts' expectations for a drop of 600,000 barrels.

Uncertainty over how Russia will respond to plans by the Group of Seven (G7) nations to cap Russian oil prices also provided some support