Oil Prices Rebound on Growing Concerns About Supply and Demand in the United States.

On Wednesday, oil prices rose marginally after falling 5% the day before on worries that demand would be hurt by increasing China COVID-19 limitations and central bank interest rate hikes.

Oil became cheaper for buyers using currencies other than the U.S. dollar because of the dollar's minor depreciation.

At 03:06 GMT, U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 90 cents, or 1%, to $92.54 a barrel after falling $5.37 the previous day on recession worries.

Futures contracts for October Brent oil LCOc1 rose 70 cents, or 0.7%, to $100.01 a barrel on Wednesday, recouping some of the $5.78 loss seen on Tuesday. The November LCOc2 contract, which sees more trading, increased by 1% to $98.80 per barrel.

Hedge funds and speculators have been spooked by the price fluctuations since the Ukraine crisis began six months ago, resulting in reduced trading volume and a more volatile market, as was evident on Tuesday.

Vivek Dhar, a commodities analyst at Commonwealth Bank, said, "I can't underline, the low liquidity means we're in for some wild moves."

On Wednesday, market confidence was bolstered by data from the American Petroleum Institute (API) showing a decrease in gasoline inventories of roughly 3.4 million barrels and a decrease in distillate stockpiles of around 1.7 million barrels for the week ending August 26 API/S.

Gasoline inventories dropped by nearly three times as much as the 1.2 million barrel decline that the average of eight analysts polled by Reuters had predicted. About a million barrels were predicted to be removed from distillate stocks.

Analysts predicted a decline of roughly 1.5 million barrels, but API data showed oil stocks grew by about 593,000 barrels.

Concerns that lockdowns and business closures are being imposed in several of China's largest cities to combat COVID-19 have curbed price hikes at a time when the world's second-largest economy is already facing lackluster development. These cities range from Shenzhen to Dalian.

Analysts at ANZ Research wrote in a note that "worsening outbreaks of COVID-19 in China are also affecting sentiment."

Three sources told Reuters on Tuesday that even though Baghdad has seen its worst violence in years, this had no effect on Iraq's ability to export oil. On Tuesday, tensions subsided as influential cleric Moqtada al-Sadr called for an end to protests.

Talk from OPEC and its allies, known as OPEC+, that they may reduce output to stabilize the market has been the primary driver sustaining prices recently. The next scheduled meeting of OPEC and its allies is set for September 5.

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Dhar warned that the two sides will "jawbone" one another. "To draw attention to the fact that futures prices aren't reflecting actual scarcity. The difficulty lies in, however, in getting everyone to agree to reduce output."