Sonali Paul

MELBOURNE, (Reuters) – Oil prices rose Wednesday after strong gains in previous sessions. Stocks unexpectedly dropped last week, while near-term travel demand picked up due to pandemic curbs easing.

U.S. West Texas Intermediate crude oil futures increased 23 cents or 0.3% to $84.38 per barrel at 0132 GMT. This was in addition to Tuesday’s 2.7% increase.

After rising 1.6% Tuesday, futures rose 36 cents or 0.4% to $85.14 per barrel.

In recent months, strong prices have been supported by tightening oil inventories around the world. The latest American Petroleum Institute data reinforced this view.

Market sources claim that API data shows U.S. crude oil stocks fell by 2.5 Million barrels in the week ending Nov. 5. This is contrary to analysts’ expectations of a 2.1million increase in crude stock in a Reuters poll.

To confirm the decline in crude stocks, Wednesday’s U.S. Energy Information Administration (EIA), weekly inventory data will be available to the markets.

Russell Hardy, CEO of Vitol Group and trading giant Vitol Group said Tuesday that demand for oil has returned to pre-pandemic levels. He also stated that demand could exceed 2019 in the first quarter 2022.

Hardy said that the possibility of a rise to $100 per barrel was possible.

The EIA’s short-term outlook predicted that gasoline prices will fall in the coming months, and this was the main driver of Tuesday’s market gains.

It was an important factor that U.S. President Joe Biden was monitoring to see if oil would be released from Strategic Petroleum Reserve in light of recent high gasoline prices.

Vivek Dhar, a Commonwealth Bank analyst stated in a note that “The EIA Report… does curb fears that the US will leak oil from its Strategic Petroleum Reserves (SPR)”, Vivek Dhar wrote.