Oil rises ahead of US inventory data

Oil drilling rigs

Oil was trading up in early session today, Dec. 28, as investors awaited the release of official data on stockpiles in the United States to gauge demand levels in light of the geopolitical tensions in the Middle East.

International benchmark Brent crude was trading up 0.19% at $79.80 a barrel, at 09:13 am Makkah time. West Texas Intermediate (WTI) crude rose 0.16% to $74.23 a barrel, after slumping 1.95% in the previous session.

"The market is likely to try the upside again... maybe in the early new year, also on expectations of a recovery in fuel demand thanks to monetary easing in the United States and higher kerosene demand during the winter in the northern hemisphere," said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities, according to a Reuters report.

Hiroyuki Kikukawa, head of the NS Trading unit at Nissan Securities, said that oil prices are likely to rise again at the beginning of the new year with continued concerns about tensions in the Middle East, as well as expectations of a recovery in demand for fuel thanks to monetary easing.

Expected in the United States, according to Reuters. Meanwhile, US oil inventories increased by 1.84 million barrels during the week ended Dec. 22, latest data from the American Petroleum Institute (API) showed. Gasoline stocks dropped by 482,000 barrels.

Official data on US inventories is scheduled for later today.