An oil pump in North Dakota
Oil prices fell about $4 a barrel on Tuesday on fears that an inflation-induced weakening of global economies would soften fuel demand. Image Credit: Reuters

Dubai: Oil prices recovered slightly on Wednesday as data pointed to firm fuel demand in the United States, providing respite after a 5 per cent drop a day earlier on fear of demand suffering from increased China COVID-19 curbs and central bank interest rate hikes.

A slightly weaker US dollar also shored up the market, with oil consequently being cheaper for buyers holding other currencies.

US West Texas Intermediate (WTI) crude futures jumped 90 cents, or 1 per cent, to $92.54 a barrel at 0306 GMT, after sliding $5.37 in the previous session driven by recession fears.

Brent crude futures for October, due to expire on Wednesday, climbed 70 cents, or 0.7 per cent, to $100.01 a barrel, trimming Tuesday’s $5.78 loss. The more active November contract was up 96 cents, or 1 per cent, at $98.80 a barrel.

“I can’t stress, the low liquidity means we’re in for some volatile moves,” said Commonwealth Bank commodities analyst Vivek Dhar.

Supporting market sentiment on Wednesday, data from the American Petroleum Institute (API) showed gasoline inventories fell by about 3.4 million barrels, while distillate stocks, which include diesel and jet fuel, fell by about 1.7 million barrels for the week ended August 26.