Oil prices rebound after two-month lows as crude stocks drop

SINGAPORE: Oil prices climbed in early Asian trading hours on Wednesday, bouncing off two-month lows hit in the prior session, after an industry group reported US crude stockpiles fell last week.

Brent crude oil futures rose 27 cents, or 0.4 per cent, to $73.29 a barrel by 0134 GMT. US West Texas Intermediate crude oil futures were up 25 cents, or 0.4 per cent, to $69.18 per barrel.

US crude stocks fell 640,000 barrels in the week ended February 21, market sources said on Tuesday citing American Petroleum Institute data. Official US stockpiles data is due later on Wednesday.

Analysts polled by Reuters estimated a 2.6-million-barrel increase in US crude stocks last week.

The report helped offset some concerns on rising oil supply around the globe. That, and dour economic reports by the US and Germany, pulled oil prices more than 2 per cent lower on Tuesday.

Brent crude closed at its lowest since December 23 on Tuesday, while WTI recorded its lowest settlement since December 10.

US data showed consumer confidence in February deteriorated at its sharpest pace in 3-1/2 years, with 12-month inflation expectations surging. Meanwhile, the German economy shrank in the last three months of 2024 compared to the prior quarter.

Oil prices have also been buffeted by concerns that US President Donald Trump’s decisions about tariffs against China, and other trading partners, could add to pressure on the country’s economy.

That has eased worries on tighter near-term oil supply despite fresh US sanctions against Iran, ANZ Bank analysts wrote in a note to clients.

Even though US policy measures could drive an up to 1 million barrel-per-day reduction in Iranian crude exports, any loss in supply from the Middle Eastern nation is countered by OPEC+ members hoping to bring more supply to the market in the months ahead, Commodity Context analyst Rory Johnston said.

Meanwhile, the US and Ukraine also agreed terms of a draft minerals deal central to Trump’s efforts to rapidly end the war in Ukraine, sources familiar with the matter told Reuters on Tuesday.

An end to the war in Ukraine could pave the way for additional Russian oil supply to hit the market.

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