Oil Prices Rise on Unexpected U.S. Inventory Draw

Oil prices increased in Asian trading on Thursday, extending gains as a surprising drop in U.S. inventory levels, particularly in gasoline stockpiles, boosted demand confidence.

Oil markets were further supported by reports that OPEC+ might defer a planned production increase.

Mixed purchasing managers index data from China, the top oil importer, showed slight business growth in October but had little impact on markets.

Brent oil futures for December rose by 0.2% to $72.72 per barrel, while WTI crude futures also gained 0.2%, reaching $68.80 per barrel as of 03:49 ET (07:49 GMT).

U.S. Inventories Shrink, Gasoline Stockpiles See Big Draw

Data from Wednesday indicated that U.S. inventories decreased by 0.5 million barrels last week, contrasting with expectations for a 1.5 million barrel increase.

Notably, gasoline stocks experienced a substantial decline of 2.7 million barrels compared to the anticipated 0.6 million barrel increase, raising hopes of a tighter market in the world's largest fuel-consuming country.

OPEC+ Could Delay December Production Hike

According to Reuters, OPEC+ is considering postponing the planned production increase from December by at least a month due to concerns over weak demand and surplus supply.

The cartel had previously delayed a 180,000 barrels per day increase from October to December in response to falling oil prices, amid worries about economic growth in China and lessening concerns about the Middle Eastern conflict.

OPEC+ has reduced its demand growth forecast for 2024 and 2025, citing China's weakening economy.

Over the past two years, OPEC+ has cut output by about 5.86 million barrels per day to stabilize oil prices and had indicated plans to increase output starting late 2024. The report from Reuters contributed to the boost in oil prices on Wednesday, although they were still recovering from earlier week's significant losses, with Brent trading only a few dollars above its 2024 lows hit in September.