Oil prices increased with optimistic forecasts for rapid oil demand recovery as vaccine rollouts accelerate and despite estimates of a build in US inventories.
International benchmark Brent crude was trading at $63.12 per barrel at 0641 GMT for a 0.66% decrease after closing Tuesday at $62.70 a barrel.
American benchmark West Texas Intermediate (WTI) was at $60.09 per barrel at the same time for a 0.56% fall after it ended the previous session at $59.75 a barrel.
The price increases were driven by hopes that the wider rollout of vaccines would help demand to recover.
US President Joe Biden said that the US would have enough COVID-19 vaccines by the end of May to inoculate every American adult.
Biden’s remarks came after the US Food and Drug Administration (FDA) approved Johnson Johnson's single-shot Covid-19 vaccine for emergency use on Saturday, while another Pharmaceutical giant Merck said it would also produce Johnson Johnson's vaccine.
However, oil markets are uncertain whether OPEC production cuts will continue after March, as the group will convene on Thursday and decide whether to keep the current cuts or ease them further. However, reports citing OPEC sources said the group will likely increase production to benefit from high oil prices.
Saudi Arabia announced earlier in January that, in addition to its OPEC commitments, it would slash crude oil production for two months by 1 million barrels per day (bpd) in February and March. In February, the group cut production to 8.125 million bpd, and in March is set to pare back output to 8.05 million bpd.
Late Tuesday, the American Petroleum Institute (API) announced its estimate of a rise of over 7.4 million barrels in US crude oil inventories relative to the market expectation of a 1.9 million-barrel fall.
If crude stocks increase in line with the API’s expectations, it signals that crude demand is falling in the US, the world's largest oil consumer, to negatively affect oil prices.
However, OPEC Secretary-General Mohammad Sanusi Barkindo’s positive comments on the oil market outlook limited further declines.
Pointing to an improving outlook for the global oil market and the world economy at large, Barkindo emphasized “cautious optimism" regarding an economic and oil demand rebound in Asia.