Oil prices rose for a second day on Wednesday as reports of expanding manufacturing activity in China, the world’s biggest crude importer, boosted the outlook for global fuel demand.
Brent crude oil for May was up 24 cents, 0.3%, to 83.69 a barrel at 0214 GMT. The April contract expired on Tuesday up $1.44, or 1.8%, at $83.89.
U.S. West Texas Intermediate (WTI) crude for April rose 31 cents, or 0.3%, to $77.36 a barrel after gaining 1.8% in the previous session.
Oil prices continue to be supported by expectations for a strong rebound in demand in China, the world’s second-largest crude consumer. Those expectations were further supported by data showing China’s factory activity rose for the first time in seven months in February, according to the purchasing manager’s index (PMI) published by Caixin/S&P Global on Wednesday.
Official government PMI data also published on Wednesday showed the fastest expansion in manufacturing since 2012 occurred in February.
However, the strong demand signal was offset by signs of rising crude stockpiles in the United States, the world’s biggest oil consumer and producer.
U.S. oil inventories rose by 6.2 million barrels in the week ended Feb. 24, according to market sources citing American Petroleum Institute (API) figures on Tuesday. [API/S] Still, gasoline inventories declined by 1.8 million barrels and distillate fuels, including diesel and jet fuel, dropped by 340,000 barrels, according to the API data.
Official U.S. government data on stockpiles is due later on Wednesday.
That data is forecast to show a 10th consecutive week of builds, with analysts in a Reuters poll expecting that a rise of nearly half a million barrels occurred last week.
Other signs of rising supply were seen from data on the Organization of the Petroleum Exporting Countries (OPEC).
In February, OPEC pumped 28.97 million barrels per day (bpd), a Reuters survey found, up by 150,000 bpd from January. Output is still down more than 700,000 bpd from September.