Oil prices rose on Thursday after data showed U.S. crude stockpiles fell more than expected last week, while the Chinese central bank's cut in banks' reserve ratio reinforced hopes of more stimulus measures and economic recovery.
Brent crude futures gained 25 cents, 0.3%, to $80.29 a
barrel as at 0430 GMT, while U.S. West Texas Intermediate crude climbed 31
cents, or 0.4%, to $75.40 a barrel.
"A significant drop in the U.S. oil inventories and
expectations of China's economic recovery and more stimulus measures supported
oil prices," said Toshitaka Tazawa, an analyst at Fujitomi Securities.
"Tensions in the Middle East were also behind
buying," he added.
U.S. crude stockpiles tumbled by 9.2 million barrels last
week, the Energy Information Administration said, more than quadruple the 2.2
million-barrel draw analysts forecast in a Reuters poll.
The draw was driven by a stark drop in U.S. crude imports
(USOICI=ECI), opens new tab as winter weather shut in refineries and kept
motorists off the road.
U.S. crude output fell from a record-tying 13.3 million
barrels per day (bpd) two weeks ago to a five-month low of 12.3 bpd last week
after oil wells froze during an Arctic freeze.
Oil prices also drew support from hopes for China's economic
recovery.
China's central bank announced a deep cut to bank reserves
on Wednesday, in a move that will inject about $140 billion of cash into the
banking system and send a strong signal of support for a fragile economy and
plunging stock markets.
China also said on Wednesday it is widening the uses for
commercial property lending by banks in its latest effort to ease a liquidity
crunch facing troubled real estate firms.
Meanwhile, geopolitical tensions in the Middle East remained
in focus, though price gains were capped as risk premiums have already been
priced in, said Priyanka Sachdeva, senior market analyst at brokerage firm
Phillip Nova.
"There is no actual damage done to crude oil supplies
... it's mere anticipation that the Red Sea contagion will lead to further
disruption in oil flow from the producing region," said Sachdeva, adding
that this anticipation has been adequately priced in.
"Oil investors do need a concrete catalyst to propel
prices any further which honestly seem (to be) missing for now, Sachdeva said.
In the latest tensions, the U.S. military carried out more strikes in Yemen early on Wednesday, destroying two Houthi anti-ship missiles that were aimed at the Red Sea and were preparing to launch, the U.S. military said. Reuters
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