Oil prices steadied in early Asian trade on Wednesday (March 8) as industry data showed a draw in US crude oil inventories, after the market tumbled in the previous session on fears more aggressive US interest rate hikes would hit demand.
Brent crude futures for April had gained eight cents to US$83.37 per barrel by 0120 GMT. US West Texas Intermediate (WTI) crude futures lost four cents to US$77.54 a barrel.
Supporting the market on Wednesday, data from the American Petroleum Institute showed US crude inventories fell by about 3.8 million barrels in the week ended March 3, according to market sources.
The drawdown defied forecasts for a 400,000 barrel rise in crude stocks from nine analysts polled by Reuters.
Gasoline inventories rose by about 1.8 million barrels, while distillate stocks rose by about 1.9 million barrels, according to the sources, who spoke on condition of anonymity.
Both Brent and WTI fell more than 3% on Tuesday after comments by US Federal Reserve chair Jerome Powell that the central bank would likely need to raise interest rates more than expected in response to recent strong data.
"This raised concerns of weaker demand in the US," ANZ Research analysts said in a note to clients.
Powell's comments propelled the US dollar, which typically trades inversely with oil, to hit a three-month high against a basket of currencies.
The dollar index rose as high as 105.65, up 1.3% on Tuesday and the highest since Dec 6. The euro dropped 1.28% to US$1.0548.
Source: Reuters