Oil Rises Over 2%

Brent crude futures climbed $2.06, or 2.48%, to $85.09 per barrel by 1044 GMT. The more active February Brent crude contract increased by 2.02% to $85.95.

U.S. WTI crude futures rose $1.69, or 2.16%, to $79.89.

Support followed anticipations of tighter crude supply.

U.S. crude oil stocks fell by 7.9 million barrels in the week finished Nov. 25, as stated by market sources quoting American Petroleum Institute figures on Tuesday.

The U.S Energy Information Administration will release official figures on Wednesday.

And the International Energy Agency predicts Russian crude production will drop by some 2 million barrels of oil per day by the end of the first quarter of next year, and its chief, Fatih Birol, informed Reuters on Tuesday.

On the demand side, additional support arrived from optimism over a demand improvement in China, the world’s largest crude consumer.

China reported fewer coronavirus infections than on Tuesday, while the market assumed that weekend protests could provoke an easing in travel restrictions.

Guangzhou, a southern city, relaxed coronavirus prevention rules in several districts on Wednesday.

A Drop in The U.S. Dollar Was Also Bearish for Prices

A softer dollar makes dollar-denominated oil contracts more affordable for holders of other currencies and increases demand.

Fed Chair Jerome Powell will speak regarding the economy and labor market on Wednesday, with investors searching for clues about when the Fed will reduce the pace of its aggressive interest rate hikes.

Capping gains, the OPEC+ determination to hold its Dec. 4 conference virtually signals little likelihood of a policy change, a source with immediate knowledge of the matter informed Reuters on Wednesday.