Oil prices rise on signs of US stockpiles drawdown, supply risks By Investing.com

Investing.com– Oil prices rose in Asian trade on Wednesday, boosted by industry data pointing to another exaggerated draw in U.S. inventories, while tensions in the Middle East and supply disruptions in Libya also provided support .

Crude oil prices were hit by losses in the previous session amid some gains after a strong rally in the past week. Lingering concerns about an economic slowdown also weighed.

U.S. crude that expires in October rose 0.5 percent to $79.92 a barrel, while it rose 0.5 percent to $75.92 a barrel by 8:25 p.m. ET (00:25 GMT).

US Inventories Shrink More Than Expected – API

Data from US oil inventories showed a draw of 3.4 million barrels in the week to August 23, more than expectations for a 3mb draw.

The data also showed sustained pullbacks in gasoline and distillate stocks.

API data usually heralds a similar reading from , due later on Wednesday.

U.S. stockpiles have fallen for eight of the past nine weeks, raising hopes that demand in the world’s biggest fuel consumer remains strong despite recent signs of a cooling economy.

But with September comes the end of the busy summer travel season, which could see some cooling in U.S. fuel demand.

Concerns about a US economic slowdown also remained in play, as did expectations that the Federal Reserve would begin cutting interest rates in September.

Middle East, Libya risks giving crude oil

Geopolitical risks have led traders to place a higher risk premium on oil.

Libya, in particular, was a key focus for markets after the country’s eastern administration reportedly suspended all oil production amid a growing dispute over the leadership of Libya’s Central Bank.

The central bank is the only internationally recognized depository for Libya’s oil exports and is at the center of a developing conflict between western and eastern factions.

Libya produced about 1.2 million barrels per day of crude in July, with any production disruption signaling tighter global markets.

In the Middle East, tensions between Israel and Hamas showed little sign of abating after weekend peace talks failed to produce an agreement. Israel and Hezbollah have been attacking each other in recent days.