Brent Oil Prices Rise Above $60

Brent crude oil futures rose above $60 a barrel on Wednesday after industry data showed a larger-than-expected drop in U.S. crude inventories, but lingering worries about a possible global recession capped gains.

Brent crude had gained 26 cents, or 0.43%, to $60.29 a barrel by 0900 GMT, after settling 0.5% higher on Tuesday, while U.S. crude was up 3 cents, or 0.05%, at $56.16 a barrel.

U.S. crude oil stocks fell by 3.5 million barrels in the week to Aug. 16, data from industry group the American Petroleum Institute (API) showed on Tuesday. Analysts polled by Reuters had expected a fall of 1.9 million barrels.

"Crude prices should see support from a bullish API stockpile report that could signal the largest Cushing draw since February 2018, if the EIA validates it," said Edward Moya, senior market analyst at OANDA in New York, referring to the draw on inventories at Cushing, Oklahoma, the delivery point for U.S. crude futures.

Inventory numbers from the government's Energy Information Administration (EIA) are due at 10:30 a.m. EDT (1430 GMT) and will be more closely watched than usual given the nearing of the end of peak U.S. driving season, analysts said.

"Private oil inventory data in the U.S. showed a medium-sized draw on crude last week, which was only partly counterbalanced by product storage increases and continues to hint at tight crude fundamentals," JBC Energy wrote in a note.

Tensions in the Middle East remained in the spotlight as U.S. Secretary of State Mike Pompeo said on Tuesday the United States would take every action it can to prevent an Iranian tanker in the Mediterranean from delivering oil to Syria in contravention of U.S. sanctions.

Oil prices were also supported by data showing lower exports in June from Saudi Arabia, the world's top oil exporter.

Saudi Arabia plans to keep its crude exports below 7 million barrels per day (bpd) in August and September despite strong demand from customers to bring the market back to balance, a Saudi oil official told Reuters earlier this month.

But uncertainty over the global economic outlook amid the U.S.-China trade war capped gains in the oil markets.

Traders are also waiting for this week's annual U.S. central bank seminar in Jackson Hole, where comments from Federal Reserve Chief Jerome Powell will be in focus.

"Market players continued to fret over recession fears and sluggish oil demand forecasts, said Stephen Brennock of oil broker PVM.

"A reprieve, however, may be on the cards tomorrow ... expectations are running high that hints of impending monetary stimulus will be plentiful". 

(Additional reporting by Jessica Jaganathan; Editing by David Holmes)