Around 1045am, the Brent January contract on the Intercontinental Exchange traded at $95.71 a barrel, up 1.12% from previous close. The December contract of West Texas Intermediate (WTI) rose 1.32% to $89.54 per barrel.
Rahul Kalantri, vice president for commodities at Mehta Equities, said, “Despite aggressive interest rate hikes by the US Fed so far, crude oil demand has remained robust, as per the industry data released on Tuesday. The American Petroleum Institute reports showed crude oil stocks fell by about 6.5 million barrels for the week ended October 28, against expectations of an increase of 4,00,000 barrels."
He, however, noted that stringent covid-19 policies in China have significantly impacted crude oil demand in the country and any change in the policies in the near term could boost global oil demand. China is the second largest importer of crude oil in the world.
Output cut by Organization of Petroleum Exporting Countries and allies has pushed up global supply deficit to 2.5 million barrels a day and are supporting oil prices, Kalantri said.
Sriram Iyer, senior research analyst at Reliance Securities, said, “Oil prices have started higher this Wednesday morning supported by a fall in inventories and possibly reopening in China from strict Covid curbs."
Analysts also noted traders are waiting for cues from the meeting of the Federal Open Market Committee (FOMC) of the US Federal Reserve that ends later in the day. The Federal Reserve is expected to raise interest rates by another 75 basis points, according market analysts.
Despite the volatility in international crude oil prices, domestic retail prices of petrol and diesel were unchanged on Wednesday. In the national capital, petrol sold for ₹96.72 per litre, while diesel was priced at ₹89.62 a litre.
