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Crude oil rises due to large drawdown in US crude inventories

Brent crude oil rises above $95 per barrel and WTI crude oil rises above $89 per barrel on Wednesday, extending gains from the previous session after an industry report pointed to a big drawdown in US crude inventories,
signaling that demand remains solid despite global growth concerns.

Data from the American Petroleum Institute showed that US crude stocks declined by about 6.5 million barrels last week, defying expectations for a build of 400,000 barrels.

Oil prices also jumped on Tuesday after an unverified social media post claimed that Chinese authorities are planning to exit Covid Zero, though the Chinese foreign ministry spokesperson said he was unaware of the plan.

Investors now await the US Federal Reserve’s latest policy decision that could affect the demand outlook. Moreover, markets continued to assess the impact of sizeable OPEC+ production cuts, as well as the looming European Union ban on Russian oil.

Howerver, US natural gas futures were trading around $6.2/MMBtu, bouncing back from an almost four-month low of $5.4/MMBtu hit in late October amid prospects of increased LNG exports and expectations of higher domestic demand. Weather forecasts showed a bout of cold temperatures for mid-November that could spur heating demand for parts of the US over the following weeks.