Oil prices rose over 1 percent on Wednesday, lifted by a report of falling U.S. crude inventories and an OPEC statement saying a planned production cut was achievable, but analysts warned that Chinese economic data could erode bullish momentum.
A slightly weaker dollar also supported oil, traders said, as it makes fuel purchases cheaper for countries using other currencies at home, potentially spurring demand.
U.S. West Texas Intermediate (WTI) crude oil futures were trading at $50.89 per barrel at 0118 GMT, up 60 cents, or 1.19 percent, from their last settlement.
International Brent crude futures were at $52.27 a barrel, up 59 cents, or 1.14 percent.
“The American Petroleum Institute crude inventory numbers were released … this has given early Asian trading a bullish start,” said Jeffrey Halley, senior market analyst at OANDA in Singapore.
Crude stockpiles fell 3.8 million barrels in the week to Oct. 14, to 467.1 million barrels, the API reported late on Tuesday.
The U.S. Energy Information Administration (EIA) is due to release official fuel storage data later on Wednesday.
Traders said oil was also being supported by Mohammed Barkindo, secretary general of the Organization of the Petroleum Exporting Countries (OPEC), expressing confidence about the prospects of a planned production cut following an OPEC meeting on Nov. 30.
“I am optimistic we will have a decision,” Barkindo said.
In its first output cut since 2008, OPEC plans to reduce production to a range of 32.50 million to 33.0 million barrels per day (bpd), compared with record output of 33.6 million bpd in September <PRODN-TOTAL>.
The group hopes that non-OPEC producers, especially Russia, will cooperate in a cut.
Beyond the immediate oil market, OANDA’s Halley said that “plenty of event risk lurks over the next 24 hours,” including Chinese gross domestic product (GDP) figures, due at 0200 GMT.
China’s economy is forecast to have expanded by 6.7 percent in the year to September, underpinned by government stimulus and a hot property market.
“Amid decelerating GDP growth in Asia, productivity gains have slowed as well, in part reflecting the lack of structural reforms,” Frederic Neumann, co-head of Asian economic research at HSBC in Hong Kong said on Wednesday in a note to clients.
“If left unaddressed, growth will inevitably slow further and financial risks will mount,” he added.