London — Crude oil futures rose more than 1% on Wednesday after industry data showed a larger than expected drop in U.S. crude inventories, but gains were capped by lingering worries about a possible global recession.
Brent crude had gained 90 cents, or 1.5%, to $60.93 a barrel by 1225 GMT, while U.S. crude was up 58 cents, or 1.03%, at $56.71 a barrel.
U.S. crude oil stocks fell by 3.5 million barrels in the week to Aug. 16, data from industry group the American Petroleum Institute (API) showed on Tuesday. Analysts polled by Reuters had expected a fall of 1.9 million barrels.
“Crude prices should see support from a bullish API stockpile report that could signal the largest Cushing draw since February 2018, if the EIA validates it,” said Edward Moya, senior market analyst at OANDA in New York, referring to the draw on inventories at Cushing, Oklahoma, the delivery point for U.S. crude futures.
Inventory numbers from the government’s Energy Information Administration (EIA) are due at 10:30 a.m. EDT (1430 GMT) and will be more closely watched than usual given the nearing of the end of peak U.S. driving season, analysts said.
Tensions in the Middle East remained in the spotlight as U.S. Secretary of State Mike Pompeo said on Tuesday the United States would take every action it can to prevent an Iranian tanker in the Mediterranean from delivering oil to Syria in contravention of U.S. sanctions.
Oil prices were also supported by data showing lower exports in June from Saudi Arabia, the world’s top oil exporter.
Saudi Arabia plans to keep its crude exports below 7 million barrels per day (bpd) in August and September despite strong demand from customers to bring the market back to balance, a Saudi oil official told Reuters earlier this month.
But uncertainty over the global economic outlook amid the U.S.-China trade war capped gains in the oil markets.
“Crude oil remains stuck, with the relief rally in recent days not removing the fear that recession risks could still send the market lower again,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Traders are also awaiting this week’s annual U.S. central bank seminar in Jackson Hole, where comments from Federal Reserve Chief Jerome Powell will be in focus.
“Market players continued to fret over recession fears and sluggish oil demand forecasts,” said Stephen Brennock of oil broker PVM.
“A reprieve, however, may be on the cards tomorrow … expectations are running high that hints of impending monetary stimulus will be plentiful”.