Crude oil prices rose on Wednesday due to expectations of a weekly decline in US crude stocks, but fears that growing coronavirus infections could stifle demand.
International benchmark Brent crude was trading at $69.64 per barrel at 06.53 GMT for a 0.88% increase after closing Tuesday at $69.03 a barrel.
American benchmark West Texas Intermediate (WTI) traded at $66.88 a barrel at the same time for a 0.81% rise after ending the previous session at $66.34 per barrel.
Late Tuesday, the American Petroleum Institute (API) predicted a drop in US crude oil stockpiles of 1.16 million barrels, compared to the market expectation of a fall of 1.26 million barrels.
A significant drop in inventories indicates an increase in crude demand in the US, the world’s largest oil consumer, assuaging market concerns over dwindling demand.
A weakening US dollar also supported the upward oil price trend.
The US dollar index, which measures the value of the American dollar against a basket of currencies including the Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, fell 0.05% to 93.08 on Wednesday.
The falling value of the dollar encourages oil-importing countries to buy more crude oil at lower dollar prices, driving up crude prices.
Oil prices have been in decline for the last five days due mainly to demand concerns, as growth in China, the world’s largest consumer, is being hampered by rising Delta variant cases and recent floods.
The Chinese economy underperformed significantly in July, with widespread flooding and an outbreak of the coronavirus Delta strain fueling fears that the country's development trajectory might lose steam.
Investors remain concerned with the lackluster economic outlook in China. Industrial production rose 6.4% in July from the same month a year ago, but well below market estimates of 7.8%. Retail sales were up 8.5%, again much lower than the 11.5% expectation.
By Sibel Morrow