Oil prices rose almost two percent on Wednesday, supported by fears of conflict in the Middle East, but the gains were tempered by rising US crude inventories and the gloomy economic outlook in Europe.
Brent crude futures rose 2.06 dollars, or 2.34 percent, to 89.14 dollars per barrel at settlement. West Texas Intermediate crude rose 1.65 dollars, or 1.97 percent, to 85.39 dollars per barrel at settlement.
The US Energy Information Administration said on Wednesday that crude inventories in the United States increased by 1.4 million barrels last week to 421.1 million barrels, exceeding an increase of 240 thousand barrels expected by analysts in a Reuters poll.
Data from the European Central Bank showed today that bank lending in the eurozone almost stopped last month, providing further evidence that the 20-nation bloc is on the verge of a recession.
Demand for crude could get a boost from the world’s largest oil importer, China, which approved a bill to issue sovereign bonds worth a trillion yuan (137 billion dollars) and allow local governments to issue new debt from their 2024 quota to boost the economy. But Beijing has also taken steps that could reduce demand for crude oil, such as capping refining capacity at one billion tonnes by 2025 to make it easier for its huge oil processing sector to operate and reduce carbon emissions.
