On indications of growing U.S. fuel demand, oil recoup some of its losses

Oil prices inched up on Wednesday after industry data revealed that U.S. gasoline inventories fell more than expected, recovering modestly after a 5% drop on Tuesday due to concerns that fuel demand may suffer as China tightens COVID-19 regulations and central banks hike interest rates.

Futures for U.S. West Texas Intermediate (WTI) crude oil rose 64 cents to $92.28 a barrel at 00:12 GMT, after plunging $5.37 per barrel the previous session owing to recession fears.

Brent crude futures increased 0.5%, or 48 cents, to $99.79 a barrel on Wednesday, erasing Tuesday's loss of $5.78 per barrel. Wednesday marks the conclusion of the contract for October. The contract for November climbed 0.6%, or 61 cents, to $98.45 per barrel.

For the week ending August 26, gasoline inventories declined by around 3.4 million barrels, while distillate inventories, which include diesel and jet fuel, decreased by about 1.7 million barrels.

The fall in gasoline supplies was nearly three times more than the average decrease of 1.2 million barrels forecast by eight Reuters analysts. They expected distillate stockpiles to decrease by 1 million barrels.

In contrast to analysts' predictions of a fall of around 1.5 million barrels, API data revealed an increase of approximately 593,00 barrels.

Concerns that several of China's largest cities, including Shenzhen and Dalian, are implementing lockdowns and business closures to combat COVID-19 at a time when the world's second-largest economy is already experiencing sluggish growth and limited price increases.

ANZ Research analysts noted in a note that mood is negatively impacted by the spread of COVID-19 in China.

Three sources told Reuters on Tuesday that the worst violence seen in Baghdad in years had no effect on Iraqi oil exports. Tuesday, violence subsided when the popular cleric Moqtada al-Sadr ordered his followers to halt their marches.