Oil prices rose 1% on Wednesday even after a surprise hike in U.S. crude inventories stoked demand concerns as economic worries competed with a tighter supply outlook for later in the year.
Brent crude futures rose 89 cents, or 1.19%, to $75.80 a barrel. West Texas Intermediate U.S. crude was up 90 cents at $71.79.
The International Energy Agency on Tuesday predicted demand would outpace supply by two million barrels per day (bpd) in the second half of the year, with China making up 60% of oil demand growth in 2023.
U.S. crude stockpiles rose by about 3.6 million barrels in the week ended May 12, according to market sources citing American Petroleum Institute figures. Seven analysts polled by Reuters, had expected a 900,000 barrel drawdown.
The crude inventory build added to concerns about U.S. growth after data showed retail sales rose 0.4% in April, short of estimates for an increase of 0.8%.
Talks on raising the U.S. debt ceiling continue to weigh on the market. The U.S. Treasury Department has estimated that the United States will go into a crippling default as early as June 1 if Congress does not lift the ceiling. President Joe Biden continues talks with congressional leaders to solve the impasse.
