The Energy Information Administration reported a drop of 5.2 million barrels in US crude stocks to 413.9 million barrels last week, while analysts expected a drop of 3.5 million barrels.
However, gasoline stocks rose 5.3 million barrels to 219.1 million barrels, while distillate stocks rose 6.2 million barrels to 118.8 million barrels.
Oil prices fell on Wednesday after US inventory data while traders continues to assess the Chinese situation.
The Energy Information Administration reported a drop of 5.2 million barrels in US crude stocks to 413.9 million barrels last week, while analysts expected a drop of 3.5 million barrels.
However, gasoline stocks rose 5.3 million barrels to 219.1 million barrels, while distillate stocks rose 6.2 million barrels to 118.8 million barrels.
The Chinese government announced an easing of Covid 19 restrictions amid hopes of improving economic outlook, however data showed Chinese exports hit April lows.
US crude futures due in January fell 3.2% to $71.8 a barrel as of 19:19 GMT.
Brent February futures fell 2.9% to $77.05 a barrel.
Dollar rose in European trade against a basket of major rivals for the third straight session off six-month lows on short-covering.
Dollar is also boosted by haven demand amid spreading warnings about US recession next week due to inflationary pressures, hurting risk appetite.
The Index
The dollar index rose 0.2% to 105.82, with a session-low at 105.45, after closing up 0.3% yesterday, the second profit in a row, away from six-month lows at 104.11.
Recession
CEOs of JPMorgan, Bank of America, and Goldman Sachs warned that inflation will threaten consumer demand, and that banks are preparing for deteriorating conditions in 2023.
US recession would no doubt force the Fed to slow down its pace of policy tightening even further, in turn underpinning gold futures.
Fed Rates
After latest strong US services data, markets now put a 25% chance for the Fed to hike rates by 75 basis points, and a 75% chance for a hike by 50 basis points.
Gold prices rose in European trade for the second session as US treasury yields declined amid prospects of a reduced rate hike by the Fed next week.
Gold is also boosted by increased haven demand amid concerns about US economic recession next year.
Gold Prices Today
Gold prices rose 0.3% to $1,775 an ounce, after rising over 0.1% yesterday, resuming gains after a tumble from five-month highs at $1,810.
US Yields
US 10-year treasury yields fell 0.7% today for another session, in turn underpinning non-yielding assets like gold.
The decline comes as most analysts now expect the Federal Reserve to only raise interest rates by 50 basis points in December.
Recession
CEOs of JPMorgan, Bank of America, and Goldman Sachs warned that inflation will threaten consumer demand, and that banks are preparing for deteriorating conditions in 2023.
US recession would no doubt force the Fed to slow down its pace of policy tightening even further, in turn underpinning gold futures.
The SPDR
Gold holdings at the SPDR Gold Trust rose 2.6 tones yesterday, the first increase since November 25, to a total of 906 tones away from 903 tones, which was a January 2020 low.