An aerial view shows an oil factory of Idemitsu Kosan Co. in Ichihara
An aerial view shows an oil factory of Idemitsu Kosan Co. in Ichihara, east of Tokyo, Japan November 12, 2021, in this photo taken by Kyodo. Picture taken on November 12, 2021. Mandatory credit Kyodo/via REUTERS Reuters

Oil prices rose in early trade on Wednesday after industry data showed a surprise drop in U.S. crude stockpiles, suggesting demand is holding up despite steep interest rate hikes dampening global growth.

Brent crude futures picked up 17 cents, or 0.1%, to $94.82 a barrel at 0014 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 26 cents, or 0.3%, to $88.63 a barrel.

Both benchmark contracts rose about 2% in the previous session on a weaker U.S. dollar and after an unverified note trending on social media said the Chinese government was going to consider ways to relax COVID rules from March 2023.

In a further positive sign for demand, data on Tuesday from the American Petroleum Institute showed crude stocks fell by about 6.5 million barrels for the week ended Oct. 28, according to market sources.

Eight analysts polled by Reuters had on average expected crude inventories to rise by 400,000 barrels.

At the same time, gasoline inventories fell more than expected, with stockpiles down by 2.6 million barrels compared with analysts' forecasts for a drawdown of 1.4 million barrels.

China's zero-COVID policy has been a key factor in keeping a lid on oil prices as repeated lockdowns have slowed growth and pared oil demand in the world's second largest economy.

"Potential changes to China's COVID-19 policy could have significant implications for oil demand," ANZ Research analysts said in a note.