Although coronavirus cases limited gains, oil prices soared on Thursday after strong data in China showing an increase in imports and the fifth consecutive weekly decline in U.S. crude inventories.
Brent crude oil futures gained 13 cents, or 0.2%, to $56.19 a barrel by 0744 GMT, while West Texas Intermediate (WTI) increased 20 cents, or 0.4%, to $53.11 a barrel.
According to customs data, China’s total crude oil imports rose 7.3% in 2020 despite the coronavirus. A record level was reached in the second and third quarters, as refineries expanded their operations and encouraged stocking at low prices. Despite the weak economic growth, it closed a strong year with positive growth. Import demand is expected to remain strong in 2021, albeit with slightly lower growth rates than last year.
Inventories of gasoline and distillate soared as refineries pushed production to the highest level since August, while U.S. crude oil inventories fell more than expected last week, the Energy Information Administration said on Wednesday.
A strong US COVID-19 aid package that new President Biden will announce on Thursday also supports prices.
Despite concerns about rising virus cases over oil demand limit price increases, the good performance of Chinese data and the US stimulus package allow many physical buyers to emerge in any price drop.
Infections in the northeastern Heilongjiang province of China, the world’s second-largest oil consumer, have nearly tripled, with the largest daily jump in new COVID-19 cases in more than 10 months.
European countries announced tighter and longer coronavirus lockdowns on Wednesday, as vaccines related to the rapidly spreading COVID variants are not yet expected to help another two to three months.
In fact, after all, oil prices are in an unprecedented struggle to balance supply and demand as factors such as the speed and impact of COVID-19 vaccines blur the picture.