Oil Prices Rise As China's Factory Gains Boost Outlook For Fuel Demand

Oil prices rose for a second day as reports of increased manufacturing activity in China on Wednesday, the world's largest crude importer, boosted the outlook for global fuel demand.

Brent crude oil was up 24 cents, or 0.3 per cent, to 83.69 per barrel. On Tuesday, the April contract expired up USD 1.44, or 1.8 per cent, at USD 83.89.

WTI crude for April in the United States rose 31 cents, or 0.3 per cent to USD 77.36 per barrel after rising 1.8 per cent the previous session.

Oil prices are still being supported by expectations for a strong rebound in demand in China, the world's second-largest crude consumer. These expectations were bolstered by data showing China's factory activity increased for the first time in seven months in February, according to the Caixin and S&P Global purchasing manager's index (PMI) released on Wednesday.

The fastest expansion in manufacturing since 2012 occurred in February, according to official government PMI data released on Wednesday.

According to market sources citing American Petroleum Institute (API) figures on Tuesday, US oil inventories increased by 6.2 million barrels in the week ended 24 February.

Despite this, gasoline inventories fell by 1.8 million barrels, while distillate fuels, such as diesel and jet fuel, fell by 340,000 barrels, according to API data.

Official US government data on stockpiles will be released later Wednesday.

That data is expected to show a 10th consecutive week of builds, with analysts polled by Reuters expecting a rise of nearly 500,000 barrels last week.

Data from the Organisation of Petroleum Exporting Countries revealed additional signs of rising supply (OPEC).

According to a Reuters survey, OPEC pumped 28.97 million barrels per day (bpd) in February, up 150,000 bpd from January. In September, output was down more than 700,000 bpd.