Crude oil prices rose on Wednesday with Brent gaining more than $1 a barrel and U.S. crude up nearly $2 as stockpiles of gasoline declined in top consumer the United States, but gains were checked by the prospect of slowing fuel demand in major economies.
Brent crude oil prices have fallen 7.5 percent and U.S. gasoline prices have tumbled nearly 12 percent since the beginning of April, reaching low prices attractive to buyers.
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The possibility of stronger demand for U.S. gasoline emerged after data from the Energy Information Administration (EIA) showed stocks of the motor fuel slumped last week, but a weak March report on U.S. durable goods orders sent U.S. equity markets lower.
"The macroeconomic headlines were disappointing again, so if anything they'd be bearish, but the market doesn't seem to be concerned about that right now. They're just responding to price," said Stephen Schork, editor of The Schork Report in Villanova, Pennsylvania.
The drawdown on gasoline stocks reflects a slight decrease in refinery utilization from last week, and fuel prices that were slightly lower than last week and more than 30 cents lower per gallon than a year earlier, according to a daily survey by the American Automobile Association (AAA).
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U.S. gasoline was up 0.6 percent at $2.73 after going as low as $2.70 this month.
Oil's gains were kept in check by gloomy economic data from big consumers. Growth in Chinese factories slowed to a crawl as export demand dwindled, while Germany, the euro zone's largest economy, saw business activity decline for the first time in five months.
The prospect of a slowing global economy dampening oil demand growth has already shaved $10 off the price of Brent since the start of April. Continued uncertainty over global growth may result in commodities facing increased volatility.
"We continue to view recent weakness in the data flow as consolidation, rather than the start of a 2012-style capitulation, but remain watchful of the loss of momentum in the manufacturing sector from these key countries," analysts from ANZ bank said in a note.
In the United States, crude stocks fell last week as imports dropped while refined fuel inventories were mixed, data from industry group the American Petroleum Institute (API) showed late on Tuesday.
API's data showed that crude inventories fell by 845,000 barrels in the week to April 19, compared with analysts' expectations for an increase of 1.5 million barrels.