Oil prices rose 2% on Wednesday as U.S. government data showed lower-than-expected crude stockpiles and larger-than-expected declines in fuel inventories.
Brent crude rose $1.33, or 1.9%, to $70.89 a barrel, while U.S. West Texas Intermediate (WTI) crude gained $1.45, or 2.2%, to $67.70 a barrel.
U.S. crude stockpiles increased by 1.4 million barrels in the latest week, below the expected 2-million-barrel rise. Gasoline inventories fell by 5.7 million barrels, significantly more than the anticipated 1.9-million-barrel draw. Distillate stocks also dropped more than expected, pointing to strong demand.
Oil prices have been supported by a weaker U.S. dollar and revised market forecasts by the Energy Information Administration (EIA), which has moved away from earlier predictions of strong oversupply. The dollar index, which fell 0.5% to a five-month low on Tuesday, made crude less expensive for buyers holding other currencies.
Concerns over inflation and the impact of tariffs on global economic growth remain in focus. U.S. consumer prices rose less than expected in February, providing temporary relief for investors. However, aggressive tariffs on imports are expected to increase costs for businesses in the coming months, adding to inflationary pressure.
U.S. trade policies continue to introduce uncertainty in financial markets. President Donald Trump’s administration has imposed new tariffs on imports, with some taking effect immediately and others set to be implemented later. Markets remain concerned that tariffs could push up costs, slow economic growth, and weaken consumer confidence.
The Organization of the Petroleum Exporting Countries (OPEC) maintained its forecast for strong global oil demand in 2025, citing continued support from air and road travel. The group also reported a 363,000-barrel-per-day increase in production by OPEC+ in February, led by higher output from Kazakhstan, which has not fully adhered to its agreed production quotas.
