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“Undersupply is the key factor that has pumped up the oil price,” said Tina Teng, an analyst at CMC Markets.
U.S. crude, gasoline and distillate stocks fell last week, according to market sources citing American Petroleum Institute figures on Tuesday. Crude inventories fell 2 million barrels, according to API, versus analysts’ expectations of a 400,000-barrel increase.
More data from the U.S. EIA will be available at 10:30 a.m. EST (1530 GMT).
Still, concerns about a possible Iran nuclear deal that could unleash more oil into global markets weighed on prices.
Brent and WTI slid about 2% on Tuesday, down for a second straight session, as Washington resumed indirect talks with Iran to revive a nuclear deal. Such a deal could lift U.S. sanctions on Iranian oil and quickly add supplies to the market, although a number of vital issues still need to be ironed out.
“With the negotiations ongoing, the oil price is likely to lose steam in the next week, despite the bump higher we’ve seen today,” Teng said, adding that there has also been some profit taking among investors who have turned cautious after prices hit more than 7-year highs.
Oil prices at near $100 a barrel could also draw more production from the United States. The Energy Information Administration expects U.S. crude output to rise 770,000 barrels per day to 11.97 million bpd in 2022.
Concerns over Ukraine, meanwhile, were on hold as French President Emmanuel Macron said he believed steps can be taken to de-escalate the crisis after a meeting with Russian President Vladimir Putin and called on all sides to stay calm.
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