Oil Prices Climb as US Crude Inventories Decline and China Imports Rise

Oil prices increased on Thursday due to declining U.S. crude inventories, boosted by higher refinery intake and an uptick in Chinese imports, signaling increased demand expectations from the world’s top two crude-consuming countries.

Brent crude futures for July climbed 64 cents, or 0.8%, to $84.22 a barrel by 0812 GMT, while U.S. West Texas Intermediate crude for June gained 66 cents, or 0.8%, reaching $79.65 per barrel.

“Oil markets were buoyed by a larger-than-expected draw in the U.S. inventory data. The improved China’s trade balance data added to the upside momentum,” said Tina Teng, an independent market analyst. She added that crude prices may continue to track economic factors in the coming days.

In the U.S., the largest oil consumer globally, crude inventories dropped by 1.4 million barrels to 459.5 million last week, as reported by the Energy Information Administration. This decline exceeded analysts‘ forecasts of a 1.1 million-barrel draw. The decrease in stockpiles coincided with a rise in refinery activity, which increased by 307,000 barrels per day during the period.

As a result, gasoline stocks surged by over 900,000 barrels to reach 228 million, while distillate stockpiles, including diesel and heating oil, increased by 600,000 barrels, reaching 116.4 million barrels.

“The market shrugged off the builds in gasoline and distillate fuels as refiners ramp up for the upcoming driving season,” noted analysts at ANZ Research in a written statement.

In April, shipments of crude to China, the world’s largest oil importer, reached 44.72 million metric tons, equivalent to around 10.88 million barrels per day (bpd), according to customs data released on Thursday. This marked a 5.45% increase from the same period a year ago.

Hopes for a ceasefire in the Israel-Hamas conflict in Gaza prevented oil prices from climbing further. The U.S. expressed confidence this week that negotiations could bridge the gaps between Israel and Hamas.

“Although there might be temporary relief for oil prices, returning to April’s highs above $90 per barrel, where geopolitical tensions peaked, could prove challenging,” remarked market strategist at IG, Yeap Jun Rong.

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.87% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.