Oil climbed more than 2% 

Oil climbed more than 2% on Wednesday, paring some of the previous day’s losses. A drop in U.S. crude inventories and concern about Hurricane Francine disrupting U.S. output countered concerns about weak global demand.

Market sources citing the latest week’s American Petroleum Institute figures on Tuesday said U.S. crude stocks fell by 2.793 million barrels, gasoline declined by 513,000 barrels, and distillates inventories rose by 191,000 barrels.

Brent crude futures were up $1.41, or 2.04%, to $70.60 a barrel at 1048 GMT, while U.S. crude futures gained $1.79, or 2.7%, to $67.54.

“The API provided some comfort as it showed a sizable decline in crude oil stocks, a forecast-beating draw in gasoline, and a tiny build in distillate inventories,” said Tamas Varga of oil broker PVM.

Both oil benchmarks tanked on Tuesday, with Brent falling below $70 to its lowest since December 2021 and U.S. crude dropping to its lowest since May 2023. This was after OPEC revised its 2024 oil demand growth forecast for a second time.

Other analysts said concern about Hurricane Francine disrupting output in the United States, the world’s biggest producer, also lent support.

“The market rebounded autonomously as Tuesday’s drop was substantial,” said Yuki Takashima, an economist at Nomura Securities, adding supply disruption fears from Francine also lent support.

The U.S. Bureau of Safety and Environmental Enforcement (BSEE) said on Tuesday that about 24% of crude production and 26% of natural gas output in the U.S. Gulf of Mexico were offline due to the storm.

Following Tuesday’s report from the API, an industry group, official inventory figures from the U.S. government are due out at 1430 GMT.

Eleven analysts polled by Reuters estimated that crude inventories rose by about 1 million barrels, and gasoline stocks fell by 0.1 million barrels.