Oil headed above $80 despite unexpected rise in US inventories

(Updated quotes)

SINGAPORE, Jan 11 (Reuters) – Oil prices reversed direction on Wednesday as market attention was divided between a surprise build in U.S. oil inventories and global economic uncertainty as China reopened.

Jumping from positive to negative territory and back, Brent futures rose by 0.75% to $80.7 per barrel by 15:33 Moscow time, WTI rose by 0.68% to $75.63 per barrel.

Both benchmarks posted gains on Monday and Tuesday, recovering from a massive sell-off in the first week of 2023.

U.S. oil inventories jumped unexpectedly by 14.9 million barrels in the week ended Jan. 6, market sources said Wednesday, citing data from the American Petroleum Institute (API).

Analysts polled by Reuters had expected a 2.2 million barrel cut in oil stocks and 500,000 in distillates.

Now traders are waiting for the official data from the US Energy Information Administration (EIA), which will be released at 18:30 Moscow time on Wednesday.

The oil market was pulled down by fears that a sharp increase in interest rates would trigger a recession and reduce demand for fuel. .

If inflation, according to the release of CPI on Thursday, is below expectations, this will lead to a decrease in the dollar, analysts say. A weaker dollar could boost demand for oil by making the commodity cheaper for buyers holding other currencies.

Prices have not jumped but have received some support from hopes of rising fuel demand in China – the world’s second largest oil consumer after the US – after Beijing eased anti-coronavirus restrictions and increased quotas on crude oil imports by 20%.

“Market players are beginning to realize that China’s return to normality is not enough to bring oil back to a sustainable position above $100 a barrel,” said Steven Brennock of PVM.

“What is required is an improvement in global growth. However, the outlook for the global economy is being held back by high inflation and tighter credit conditions.” Original message in English available at code: (Shadia Nasrallah in London, Sonali Paul in Melbourne and Trixie Yap in Singapore)

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