08.02.202319:36:00UTC+00Oil Futures Settle Higher Again Despite Surge In Inventories

Despite data showing an increase in U.S. crude inventories last week, oil futures settled higher on Wednesday, extending gains to a third straight session, amid hopes of higher demand from China.

West Texas Intermediate Crude oil futures for March ended higher by $1.33 or about 1.7% at $78.47 a barrel.

Brent crude futures settled at $85.09 a barrel, up $1.40 or about 1.7%.

Data from U.S. Energy Information Administration (EIA) showed crude inventories in the U.S. rose by 2.423 million barrels in the week ended February 1, in line with expectations.

The EIA data also showed gasoline inventories increased 5 million barrels last week, about four times the expected surge. Meanwhile, distillate stockpiles rose by 2.932 million barrels as against expectations for an increase of 0.097 million barrels.

Edward Moya, Senior Market Analyst at OANDA, says oil prices are higher on optimism the global economic outlook won't get crushed over tightening by central banks. He expects the oil market will likely remain balanced over the short-term, but the risks are clearly to the upside.

"oil demand situation appears to be improving and hence oil shouldn't selloff at all," he adds.