Crude oil prices rebounded on Wednesday as demand recovery hopes in top importer China following its exit from Covid-19 pandemic curbs provided support after prices dropped in the previous session on concerns about global economic growth.

Brent crude futures gained 59 cents, or 0.7 per cent, to $86.72 per barrel by 0214 GMT after falling 2.3pc in the previous session. US West Texas Intermediate (WTI) crude futures rose 46 cents, or 0.6pc, to $80.59 per barrel, having dropped 1.8pc on Tuesday.

The economic worries were exacerbated by a bigger-than-expected build in US oil inventories that was reported after the market settled on Tuesday.

US crude stocks rose by about 3.4 million barrels in the week ended Jan 20, according to market sources citing American Petroleum Institute figures on Tuesday. That was triple the build of about 1m forecast in a preliminary Reuters poll on Monday.

“But the build is expected to be temporary as the supply disruptions from a cold snap in the United States a few weeks ago would only impact on the data in the next couple of weeks,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

Official data from the US Energy Information Administration will be released later on Wednesday.

“Expectations that China’s fuel demand will recover in the second half of the year are growing and are likely to support the market sentiment,” Kikukawa said, predicting that WTI will trade in a range between $75 and $85 a barrel in the coming weeks.

Oil supply should remain steady for the medium term as the Organisation of the Petroleum Exporting Countries (Opec) and its allies, a group known as Opec+, is expected to keep their output quotas.

An Opec+ panel is likely to endorse the producer group’s current oil output policy when it meets next week, five Opec+ sources said on Tuesday, as the hopes for higher Chinese demand are balanced by worries over inflation and the global economy.

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Blatant Islamophobia
Updated 30 Jan, 2023

Blatant Islamophobia

Muslim extremists and terrorist outfits are emboldened by hateful acts.
Modern slavery
30 Jan, 2023

Modern slavery

MODERN slavery is a wide-ranging term that can encompass a multitude of scenarios. Common to all of them, however, ...
Remarkable Sania
30 Jan, 2023

Remarkable Sania

BRINGING to a close a career in which she smashed stereotypes, Sania Mirza delivered almost the perfect ending in ...
Losing grip
Updated 29 Jan, 2023

Losing grip

The state and the government are responsible for providing Imran with the security he deserves as a former prime minister.
Telling silence
Updated 29 Jan, 2023

Telling silence

THE silence of the Sindh government over the recent exposé in this paper about Karachi’s water tanker mafia ...
Palestine escalation
29 Jan, 2023

Palestine escalation

THE fire of conflict once again threatens to envelop the land of Palestine, as the growing cycle of violence refuses...