Oil prices surged in early Asian trading on Wednesday after a U.S. trade group reported a significant decline in crude oil inventories prior to the government’s publication of data.
By 10:38 AM local time in Bangkok, Brent crude rose by 33 cents, or 0.41%, to $81.10 a barrel, meanwhile, U.S. West Texas Intermediate crude rose 42 cents, or 0.54%, to $77.49 a barrel.
The American Petroleum Institute (API) reported that there was a drop of 6.1 million barrels in U.S. oil stockpiles in the week ending April 21. This was significantly larger than the expected draw of roughly 1.5 million barrels.
The API report indicates tighter crude supplies in the world’s top oil consumer, which is consistent with the reading expected from government data arriving later in the day. A decline in oil stockpiles indicates a degree of resilience in fuel demand, particularly as weather conditions improve.
However, rising concerns about a potential economic recession have further overshadowed any positive effects of tighter U.S. supply this year. This is because high interest rates are having an increasingly negative effect on the world’s largest economy, as evidenced by a spate of disappointing corporate earnings and poor economic data.
On Monday, the U.S. regional lender First Republic reported the loss of more than $100 billion in deposits, fueling concerns of a possible banking crisis.
