Investing.com-- Oil prices rose in Asian trade on Wednesday, recouping a measure of recent losses as industry data showed an unexpected draw in U.S. inventories, while the Middle East conflict remained in focus.
Markets were also awaiting a string of key economic readings and central bank meetings in major economies over the coming days, which are likely to factor into the outlook for oil demand.
Brent oil futures expiring in December rose 0.5% to $71.50 a barrel, while West Texas Intermediate crude futures rose 0.6% to $67.63 a barrel by 00:11 ET (04:11 GMT).
Both contracts fell sharply this week after a less severe than feared strike by Israel against Iran helped ease some concerns over a dire escalation in the Middle East conflict. But Israel maintained its offensives against Hamas and Hezbollah, with few signs that a ceasefire was close.
US inventories see weekly draw- API
Data from the American Petroleum Institute showed U.S. oil inventories saw a draw of 0.57 million barrels in the past week, compared to expectations for a build of 2.3 million barrels.
The reading usually heralds a similar trend in official inventory data, which is due later on Wednesday, and offered some relief to oil markets, in that it indicated supplies in the world’s biggest fuel consumer were somewhat tight.
Still, U.S. oil demand is expected to cool in the coming months as the winter season deters travel, while sustained pressure on the economy from sticky inflation and high interest rates is also expected to weigh.
The upcoming presidential elections were also a key point of uncertainty for markets, given that they will determine U.S. policy for the next four years. Donald Trump and Kamala Harris are set for a tight race, with both candidates promising increased U.S. oil production as part of their agenda.
Economic data, central bank meetings in focus
Key data prints from several major economies are due in the coming days, as are major central bank meetings.
Third-quarter gross domestic product data from the euro zone and the U.S. is due later on Wednesday. PCE price index data- the Federal Reserve’s preferred inflation gauge- and nonfarm payrolls data- a key labor market reading- are due on Friday.
The prints come before a Fed meeting next week, where the central bank is widely expected to cut rates by 25 basis points.
In Asia, purchasing managers index data from top oil importer China is due on Thursday. A meeting of the country’s National People’s Congress is set for next week and is expected to provide more cues on plans for increased fiscal spending.
The Bank of Japan is set to decide on interest rates on Thursday, amid heightened political uncertainty in the country, while the Reserve Bank of Australia is set to meet next week.