Oil prices rose Thursday after data showed U.S. crude oil inventories fell more than expected last week, China’s central bank cut banks’ reserve ratios and hopes for more stimulus measures and an economic recovery.
Brent crude futures were up 25 cents, or 0.3%, at $80.29 a barrel by 04:30 GMT. West Texas Intermediate crude (WTI) was up 31 cents, or 0.4%, at $75.40 a barrel.
The significant decline in US oil inventories, tensions in the Middle East, expectations for economic recovery in China, and further stimulus measures have supported oil prices.
The Energy Information Administration (EIA) stated that US crude stocks fell by 9.2 million barrels last week. Which was more than four times the 2.2 million barrel forecast in an analysts’ survey.
The pullback in inventories was driven by a sharp decline in U.S. crude imports and developed as refinery shutdowns caused by cold weather and drivers refrained from traveling.
U.S. crude oil production fell from a record-breaking 13.3 million barrels per day (bpd) two weeks ago to 12.3 barrels per day, a five-month low, last week after the Arctic cold froze oil wells.
China’s central bank said on Wednesday that it would inject approximately $140 billion in cash into the banking system, sending a strong signal of support to the fragile economy and stock markets.
China also said on Wednesday that banks are expanding their use of commercial property loans to ease the liquidity crunch faced by troubled real estate firms.
Meanwhile, geopolitical tensions in the Middle East are in the focus, but price gains are limited as risk premiums are already priced in.
There is no serious damage to crude oil supplies. Of course, the state of war in the Red Sea is likely to lead to further disruptions in the flow of oil from the producing region, but this expectation is adequately priced.
Oil investors need a concrete catalyst to push prices even higher, which seems to be lacking for now.
