Oil Prices Increased Slightly in Asia

Oil prices saw a minor increase during Asian trade on Wednesday, buoyed by positive sentiment over stimulus measures in China, the largest oil importer. Traders remained in anticipation of additional signals regarding the U.S. economy and oil inventories.

Despite the modest gains in crude markets, the strengthening dollar limited further upward movement ahead of important U.S. inflation data anticipated later in the day, which could influence the interest rate outlook.

Ongoing geopolitical tensions also contributed to oil's risk premium as traders looked forward to the establishment of a new government in Syria following the ousting of President Bashar al-Assad by rebels.

Brent oil futures set to expire in February increased by 0.4% to $72.47 per barrel, while West Texas Intermediate (WTI) crude futures rose by 0.4% to $68.55 per barrel as of 20:41 ET (01:41 GMT).

US Inventories Experience Unexpected Increase – API

Data from the American Petroleum Institute (API) revealed an unexpected rise in U.S. oil inventories, showing a growth of about 0.5 million barrels for the week ending December 6, contrary to expectations of a 1.3 million barrels drawdown.

The API report also indicated increases in gasoline and distillate inventories for the second consecutive week, suggesting resilience in U.S. supplies, especially amid record-high domestic oil production.

Demand is projected to decline during the winter, potentially keeping inventories elevated in the months ahead. The API data typically precedes a similar report from official sources, which is set for later Wednesday.

Oil Supported by China’s Stimulus; OPEC Report Anticipated

This week, oil prices gained momentum following China's commitment to loosening monetary policy and implementing targeted stimulus measures aimed at bolstering economic growth. The world's largest oil importer’s steps raised hopes for a recovery in oil demand linked to stronger economic activity. Positive trade data reflecting a significant increase in Chinese oil imports through November further supported market sentiment.

However, traders are eagerly awaiting more details about Beijing's stimulus plans. The Central Economic Work Conference, kicking off later on Wednesday, is anticipated to provide additional guidance.

In broader terms, attention turns to critical U.S. consumer price index data due for release on Wednesday for further indications regarding interest rates. The dollar strengthened in preparation for these figures.

Later today, the Organization of Petroleum Exporting Countries (OPEC) is expected to issue their monthly report following last week's decision to extend existing supply cuts until the second quarter of 2025.