April,26(Agencies)—Oil prices were mixed on Wednesday as falling U.S. inventories lifted the U.S. WTI price while Brent benchmark steadied as market took stock of weak U.S. data that raised fears of recession in the world’s biggest economy.
Brent crude eased by 9 cents, or 0.1%, to $80.68 a barrel by 1035 GMT. U.S. West Texas Intermediate crude gained 23 cents, or 0.3%, to $77.30.
U.S. crude oil stocks fell by about 6.1 million barrels in the week ended April 21, according to market sources citing American Petroleum Institute (API) figures on Tuesday. Analysts had expected crude inventories to fall by about 1.5 million barrels.
Gasoline inventories fell by 1.9 million barrels last week while distillate inventories rose by 1.7 million barrels, the sources said. Official stockpiles data from the U.S. government is due on Wednesday.
U.S. crude oil stockpiles have been falling since the middle of March as refineries have increased runs to produce more gasoline ahead of the peak summer demand period that starts in May. This has pushed WTI futures prices into backwardation, when prompt futures are higher than later-dated futures, reflecting the higher refinery demand.
Oil prices dived more than 2% on Tuesday, moving towards the level before the Organization of the Petroleum Exporting Countries (OPEC) and producer allies such as Russia, known collectively as OPEC+, announced an additional output reduction until the end of the year.
While the API data pushed the market higher on Wednesday, lingering economic concerns and expectations of further interest rate hikes that could curtail fuel demand growth are countering signs of improving short-term consumption gains.
U.S. consumer confidence dropped to a nine-month low in April as worries about the future mounted, heightening the risk of the economy falling into recession this year.
“This (data) will add credence to claims that the U.S. economy is edging closer to a recession,” said PVM Oil’s Stephen Brennock. Investors also showed concern that potential interest rate hikes by inflation-fighting central banks could slow economic growth and dent energy demand in the United States, Britain and the European Union.
U.S. Federal Reserve, the Bank of England and the European Central Bank are all expected to raise rates at their coming meetings. The Fed meets over May 2-3.