Brent crude oil price news: Oil prices rose in early trade on Wednesday, adding to gains in the previous session, after industry data showed a surprise drop in US crude stocks last week, a positive sign for demand, and attention shifted away from hostilities in the Middle East.

Brent crude futures rose 9 cents, or 0.1 per cent, to $88.51 a barrel and US West Texas Intermediate crude futures gained 10 cents, or 0.11 per cent, to $83.45 a barrel at 0031 GMT.

US 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 US data on oil and product stockpiles due at 10:30 a.m. (1430 GMT) for confirmation of the big drawdown. Meanwhile, expectations are growing that interest rates will be cut in the UK and EU in June, which could help support economic growth and, in turn, oil demand.

In the euro zone and the UK business activity this month was expanding at its fastest pace in nearly a year, suggesting that economic growth "continued to gather momentum", Capital Economics said in a note.

"While sticky services price pressures remain upside risks to inflation, we still expect central banks to start cutting rates in the next few months," the note said. In the US, 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.

"US business activity in April was at its lowest pace this year," ANZ Research said in a note. "This could help convince policy makers that rate cuts are required to support the economy." Traders have largely ignored the latest developments in the Middle East in early trade on Wednesday where, according to residents, Israeli strikes intensified across Gaza in some of the heaviest shelling in weeks.

The fall in US crude inventories has offered some relief to a market fraught with geopolitical concerns and has been a key driver of the modest price rally observed in oil futures. Notably, the decline in stockpiles points to robust demand conditions in the United States, the world's largest oil consumer. This demand scenario is crucial, especially against the backdrop of discussions about energy transitions and decarbonization. Furthermore, the potential for interest rate cuts suggests a proactive approach by central banks to shore up economic growth, which could offset some of the headwinds facing oil demand.

Market analysts will be keenly examining future data releases and central bank communications for clearer indications of economic trends and monetary policy directions. In the United Kingdom, the prospect of rate cuts is particularly significant given the recent challenges related to Brexit uncertainties and their implications for the UK's economic stability and growth. The situation is similar in the euro zone, where sustained expansion in business activity is expected to mitigate inflationary pressures and justify the anticipated rate adjustments by the European Central Bank.

The possible monetary easing aligns with the latest snapshots of business activity, pointing to varying economic dynamics across major economies. For instance, the accelerated rate of expansion in the euro zone and UK's business activity contrasts with the cooling trend of the US business sector. Policymakers and investors, therefore, face the complex task of deciphering these mixed signals—balancing growth, inflation, and the appropriate levels of stimulus or restraint.

This bears significant implications for global markets, including commodities like crude oil, where pricing is sensitive to shifts in economic indicators and monetary policy. Commodity traders and oil market stakeholders will be decoding these signals to anticipate market movements, and the focus will extend beyond immediate stockpile figures to broader economic health as a determinant of future demand.

While the oil market's attention has been largely centered on economic data and monetary policy, it is also attuned to developments in geopolitics that directly influence oil supply dynamics. The Middle East remains a critical region for oil market watchers, with any escalation in conflict having the capacity to impact supplies and introduce volatility to the market. The ongoing situation in Gaza and the intensified Israeli strikes, while not currently at the center of the market players' attention, represents an undercurrent of risk that could quickly come to the fore should the situation escalate further.

As market participants weigh these different factors, oil price trajectories will continue to respond to a complex interplay of demand-side dynamics, geopolitical concerns, and central bank policy decisions. Therefore, while the immediate news of a drawdown in US crude stocks has provided a boost, it is part of a much larger narrative that will require continued monitoring and analysis by those engaged in the market.