Prior to OPEC+ oil producers meeting, oil edges higher

Oil prices posted limited gains on Wednesday over an estimated drop in US crude inventories and fading fears of the omicron impact on demand, while uncertainty over the output decision of OPEC+ producers through March is hindering further upward movements.

International benchmark Brent crude was trading at $89.31 per barrel at 0644 GMT with a 0.16% gain after closing the previous session at $89.16 a barrel.

American benchmark West Texas Intermediate (WTI) traded at $88.37 per barrel at the same time for a 0.19% rise after it ended the previous session at $88.20 a barrel

The American Petroleum Institute (API) announced late Tuesday its estimate of a fall of 1.66 million barrels in US crude oil inventories, less than the market expectation of a fall of 1.8 million barrels.

The forecast of an inventory draw signals a recovery in crude demand in the US, easing investor concerns over dwindling demand, which, in turn, supports higher prices.

Relief over fading omicron fears

Upward support also came with more investor confidence from the easing of pandemic-related measures in most European countries where a high uptake in vaccination rates is evident despite a rise in mild COVID-19 cases.

Denmark is leading the return to normalcy, pushing aside concerns over growing cases of the omicron variant.

Countries like the UK, France, Sweden, Norway, Finland and Austria have also decided to either completely remove COVID-19 measures or ease restrictions.

However, investors are cautious ahead of the much-awaited meeting of the OPEC group and allies, known as OPEC+, later on Wednesday.

It is expected that the group will continue its policy to increase output by 400,000 barrels per day (bpd) through March.