Oil prices saw a modest rebound on Wednesday after a series of declines, driven by signs of supply tightness stemming from output cuts by major producers, Reuters reports.
According to Reuters’ figures, Brent crude futures rose by 17 cents to $82.21 a barrel after declining for four straight sessions, while U.S. West Texas Intermediate crude futures bounced back from a 2-day decline to increase by 19 cents to $78.34 a barrel.
The rebound comes despite concerns about demand growth in China, the world’s largest crude consumer, as the country’s economic growth target for 2024 lacked significant stimulus plans.
“The market wanted more details on how China intends to achieve its 5% growth target for 2024 and specifically was hoping to see further fiscal expansion to help meet the growth target,” said Tony Sycamore, a market analyst at IG in Sydney.
Sycamore noted that markets are awaiting clarity on U.S. Federal Reserve Chair Jerome Powell’s testimony to Congress and Friday’s U.S. employment data, which could influence U.S. interest rates and, consequently, oil demand.
However, oil prices found support from the recent extension of output cuts by the Organization of the Petroleum Exporting Countries and its allies (OPEC+), which has contributed to supply tightness, particularly in Asian markets.
The disruption in oil tanker movements due to attacks in the Red Sea has also tied up barrels in transit.
Despite a “risk-off tone” in the markets, signs of physical tightness persist, with Saudi Arabia raising prices for April crude sales to Asia.
Additionally, the American Petroleum Institute reported smaller-than-expected increases in U.S. crude stocks, with gasoline and distillate fuel stocks showing declines.
