#Brentcrude futures rose 26 cents, or 0.29%, to $88.68 a barrel and #usa West #Texas Intermediate crude futures climbed 26 cents, or 0.31%, to $83.62 a barrel at 0634 GMT.

U.S. 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 U.S. data on oil and product #stockpiles due at 10:30 a.m. EDT (1430 GMT) for confirmation of the big drawdown.

#usabusiness 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.

“This could help convince policy makers that rate cuts are required to support the economy,” ANZ analysts said in a note.

U.S. interest rate cuts could bolster economic growth and, in turn, demand for oil from the world’s top consumer of the fuel.

#Analysts were still bullish that any latest developments in conflicts in the Middle East will still support markets, though the impact on oil supplies remains limited for now.

“Overall, crude oil prices are well supported around current levels by on-going Middle East risk premium. On the topside, risk of possible renewed #OPEC production increase from Jun will help limit any significant upside,” said head of markets strategy for United Overseas Bank (OTC:#UOVEY) (UOB) in Singapore Heng Koon How.

“We maintain our forecast for #Brent to consolidate at USD 90/bbl by end of this year,” #Heng added.

Israeli #strikes intensified across Gaza on Tuesday, in some of the heaviest shelling in weeks.

“Recent reports suggest that both Iran and Israel consider the current operations concluded against one another, with no follow-up action required for now,” ING analysts said in a note.

“The #usa and #Europe are preparing for new sanctions against #Iran – although these may not have a material impact on oil supply in the immediate term,” they added.