Oil gains on Middle East war concerns, US crude stockpile drop

Oil prices climbed on Wednesday after an industry report showed U.S. crude and gasoline inventories fell and as the market watched for a possible widening of the Israel-Gaza war, which may impact global oil supplies, Reuters reported.

Brent crude futures rose 56 cents, or 0.7%, to $81.25 a barrel by 0540 GMT. U.S. West Texas Intermediate crude increased by 59 cents, or 0.8%, to $78.94 per barrel.

U.S. crude oil and gasoline inventories fell last week, while distillate stocks rose, according to market sources, citing American Petroleum Institute data on Tuesday.

The API figures showed crude stocks declined by 5.21 million barrels in the week ended Aug. 9, the sources said, speaking on condition of anonymity. Gasoline inventories eased by 3.69 million barrels, and distillates rose by 612,000 barrels.

Falling inventories could indicate higher demand in the U.S., the world’s biggest oil consumer.

Official government data from the Energy Information Administration is due later on Wednesday.

Capping oil price gains however, the International Energy Agency (IEA), kept its 2024 global oil demand growth forecast unchanged on Tuesday but trimmed its 2025 estimate, citing the impact of a weakened Chinese economy on consumption.