# Oil prices rise on U.S. drawdown, Chinese fears weigh
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-12-21
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Oil prices rise 2% on record U.S. crude draw, demand fears
Meta Description: Find out why oil prices surged, news analysis on U.S. crude stockpile decrease, and China demand fears. Stay informed with reliable Reuters reporting.
URL: https://financedigest.com/oil-prices-rise-on-u-s-drawdown-chinese-fears-weighhtml

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By Shadia Nasralla and Rowena Edwards

LONDON (Reuters) -Oil prices rose by more than 2% on Wednesday after data suggested a larger than expected draw in U.S. crude stockpiles, but [gains were capped by growing concerns over demand](https://www.financedigest.com/oil-gains-after-iea-sees-demand-rising-to-record-high.html "Oil gains after IEA sees demand rising to record high") in China and a snow storm that is expected to hit U.S. travel.

Brent crude futures were up by $1.77, or 2.2%, at $81.76 a barrel by 1306 GMT. U.S. West Texas Intermediate (WTI) crude [futures gained](https://www.financedigest.com/dollar-gains-as-wall-street-retreats-on-future-fed-hikes.html "Dollar gains as Wall Street retreats on future Fed hikes") $1.68, or 2.2%, to $77.91.

U.S. crude inventories fell by about 3.1 million barrels in the week to Dec. 16, said market sources, citing [data from the American Petroleum Institute](https://www.financedigest.com/use-case-centric-data-management-why-it-is-the-future-of-data-management-for-financial-institutions.html "Use Case centric data management – Why it is the future of data management for financial institutions"). Nine analysts [polled by Reuters](https://www.financedigest.com/germany-home-prices-to-sink-nearly-6-this-year-reuters-poll.html "Germany home prices to sink nearly 6% this year – Reuters Poll") had forecast a drop of 1.7 million barrels. Official [government data is due](https://www.financedigest.com/uniper-ceo-to-resign-due-to-government-takeover.html "Uniper CEO to resign due to government takeover") at 1530 GMT. \[EIA/S\]

Prices were also boosted by comments from Saudi Arabia’s energy minister, who said on Tuesday that the heavily criticised move by [OPEC+ to cut](https://www.financedigest.com/dollar-skids-after-soft-u-s-economic-data-impact-of-opec-cuts-fades.html "Dollar skids after soft U.S. economic data; impact of OPEC+ cuts fades") oil output turned out to be the right decision.

The comments suggest that OPEC+ may continue to keep [supply tight](https://www.financedigest.com/ceraweek-europe-gas-supplies-to-stay-tight-2-more-winters-equinor-ceo-says.html "CERAWEEK-Europe gas supplies to stay tight 2 more winters, Equinor CEO says"), said CMC Markets analyst Tina Teng.

Potentially curtailing [oil demand](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook"), huge parts of the United States are forecast to face heavy snow that is likely to cause flight delays and impassable roads during one of the busiest travel periods of the year.

Worries about surging COVID-19 cases in [China as the country begins dismantling its zero-COVID policy kept oil](https://www.financedigest.com/oil-rises-about-2-with-u-s-and-china-inflation-in-focus.html "Oil rises about 2% with U.S. and China inflation in focus") prices from moving higher.

However, China’s crude [oil imports from Russia](https://www.financedigest.com/oil-markets-steady-as-investors-weigh-banking-crisis-russia.html "Oil markets steady as investors weigh banking crisis, Russia") in November rose 17% year on year as Chinese refiners rushed to secure more cargoes ahead of a price cap imposed by the Group of Seven nations and an EU embargo from Dec. 5.

Overall, Russian [oil exports](https://www.financedigest.com/u-s-oil-exports-to-europe-hit-record-in-march-on-steep-discounts.html "U.S. oil exports to Europe hit record in March on steep discounts") fell by 11% month on month for Dec. 1-20 after the [European Union’s embargo on Russian oil came into force](https://www.financedigest.com/european-privacy-watchdog-creates-chatgpt-task-force.html "European privacy watchdog creates ChatGPT task force"), the Kommersant daily reported.

(Reporting by Shadia Nasralla, Dmitry Zhdannikov and Rowena Edwards;Additional reporting by Isabel Kua in SingaporeEditing by David Goodman)


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