By Gina Lee
Investing.com – Oil was up Wednesday morning in Asia, boosted by a surprise draw in U.S. crude oil supplies and a drop in Chinese COVID-19 cases raising hopes for increased fuel demand.
was up 0.41% to $55.87 by 11:08 PM ET (4:08 AM GMT) and gained 0.51% to $52.88. Both Brent and WTI futures remained above the $50 mark.
released on Tuesday showed a draw of 5.272 million barrels for the week ending Jan. 22. Forecasts prepared by Investing.com had predicted a 603,000-barrel build, and API reported a 2.562-million-barrel build during the previous week.
The data also showed gasoline stocks rose by a bigger-than-expected 3.1 million barrels.
“The crude oil drawdown has offered some support to the market in early trading this morning with the market expecting a build … on the product side, the numbers were less constructive,” ING economics said in a note.
Distillate fuel inventories, including diesel and , rose by 1.4 million barrels against expectations for a draw of 361,000 barrels, and refinery runs fell by 76,000 barrels per day.
“It’s difficult for oil traders to make a definitive near-term shift to the next price level higher given the very uncertain near-term demand outlook,” Axi Global Markets Strategist Stephen Innes said in a note.
Investors now await , due later in the day.
However, the black liquid was boosted by reports of China’s report of a decline in daily COVID-19 cases. The news in the world’s largest oil importer eased worries about the expected sharp drop in travel over the upcoming Lunar New Year holidays.
The country reported 75 new daily of COVID-19 on Wednesday, the lowest daily rise since Jan. 11. However, travel over the holidays, which usually sees hundreds of million travel to their hometowns, has been discouraged to prevent the spread of COVID-19.
“There are rising concerns that the outbreak in China will see crude oil demand suffer,” ANZ Research said in a note, which cited Ministry of Transport estimates that the number of passenger trips taken will decrease 40% from 2019.
The number of global COVID-19 cases as of Jan. 27, according to Johns Hopkins University data.
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