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Oil Prices Inch Up as Market Weighs US Stocks Decline

Oil prices were slightly higher on Wednesday after industry data showed a surprise drop in U.S. crude stocks last week, a positive sign for demand, though markets were also keeping a close eye on hostilities in the Middle East.

Brent crude futures gained 5 cents, or 0.06%, to $88.47 a barrel and U.S. West Texas Intermediate crude futures climbed 8 cents, or 0.1%, to $83.44 a barrel at 0410 GMT. U.S. crude inventories fell 3.237 million barrels in the week ended April 19, according to market sources citing American Petroleum Institute figures.

In contrast, six analysts polled by Reuters had expected a rise of 800,000 barrels. Traders will be watching for the official U.S. data on oil and product stockpiles due at 10:30 a.m. EDT (1430 GMT) for confirmation of the big drawdown.

U.S. business activity cooled in April to a four-month low, with S&P Global saying on Tuesday that its flash Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to 50.9 this month from 52.1 in March. “This could help convince policy makers that rate cuts are required to support the economy,” ANZ analysts said in a note.

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