Oil prices were largely stable on Wednesday despite market participants being pushed in several ways by a surprise increase in US oil and fuel stocks, a lack of confidence in the global economy, and China's decision to reopen its economy.

As Brent crude futures fluctuated between the positive and negative zones, they were up 53 cents, or 0.7%, at $80.63 per barrel at 0921 GMT. The price of a barrel of US West Texas Intermediate (WTI) oil increased by 41 cents, or 0.6%, to $75.53.

On Monday and Tuesday, both contracts increased, recovering from a severe selloff that occurred in the first week of 2023.

According to sources quoting statistics from the American Petroleum Institute, US crude oil stockpiles increased by 14.9 million barrels in the week ending January 6. (API). Stocks of distillate increased by roughly 1.1 million barrels at the same time.

Reuters polled analysts, and they predicted a decline in crude stockpiles. The US Energy Information Administration's inventory data, which is generally released at 1530 GMT, will be closely watched by traders.

Fears that abruptly higher interest rate increases to control inflation would cause a recession and reduce fuel demand have dragged down the price of oil. On Thursday, US inflation numbers are expected.

Although prices have not increased, they have benefited from expectations that fuel demand will climb in China, the world's second-largest oil user after the US, after it relaxed COVID-19 restrictions and lifted crude import quotas by 20%.

Market participants are realising that China's return to normalcy won't be sufficient to lift oil back above $100 per barrel on a consistent basis, according to PVM analyst Stephen Brennock.

"An increase in global growth is necessary. Yet, high inflation and tightened lending restrictions limit the prognosis for the global economy."