Oil gains 1% after U.S. crude inventories signal tighter supply By Reuters

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© Reuters. FILE PHOTO: Storage tanks are seen at the Petroineos Ineos oil refinery in Lavera, France, March 29, 2022. REUTERS/Benoit Tessier

By Stephanie Kelly

(Reuters) – Oil prices rose at the start of Asian trading on Wednesday after industry data showed drawdowns and fuel inventories, raising supply concerns.

The gains come on the heels of news on Tuesday that the European Union is working on new sanctions against Russia for waging a war against Ukraine that will target Moscow’s oil industry.

European Commission President Ursula von der Leyen is expected to outline the plans on Wednesday, officials said.

futures rose 90 cents, or 0.9%, to $105.87 a barrel at 0001 GMT. WTI crude futures rose $1.00, or 1%, to $103.41 a barrel.

US crude and fuel inventories fell last week, market sources said, citing figures from the American Petroleum Institute. Crude inventories fell 3.5 million barrels for the week ended April 29, the sources said. [API/S]

“The API report got people to stop worrying about the demand side and start worrying about the supply side again,” said Price Futures Group analyst Phil Flynn.

Data from the US government on stocks is due on Wednesday.

In the previous session, demand concerns stemming from prolonged COVID-19 lockdowns in China sent prices down more than 2%.

Beijing is testing residents en masse to avoid a lockdown similar to Shanghai’s over the past month. Restaurants in the capital were closed for dinner while some apartment buildings were sealed.

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