2024.01.2419:15:00UTC+00Oil Futures Settle Higher On Bigger Than Expected Increase In Inventory

Oil prices climbed higher on Wednesday on data showing a larger-than-expected decline in U.S. crude inventory, and amid optimism about increased demand from China after announcement of a stimulus.

A weak dollar contributed as well to the uptick in oil prices.

West Texas Intermediate Crude oil futures for March ended higher by $0.72 or nearly 1% at $75.09 a barrel.

Brent crude futures ended up $0.49 or about 0.6% at $80.04 a barrel.

"Geopolitical risk and the threat of delays and disruption are causing some alarm but that's not being particularly reflected in the price at this stage," says Craig Erlam, Senior Market Analyst at OANDA, U.K. & EMEA.

Data released by U.S. Energy Information Administration (EIA) showed crude inventory dropped by 9.2 million barrels in the week ended January 19th, more than four times the expected declined of 2.2 million barrels.

Gasoline stockpiles increased by 4.9 million barrels last week, more than twice the expected increase of 2.3 million barrels. Meanwhile, distillate stockpiles dropped 1.4 million barrel, as against expectations for a rise of 348,000 barrels.

In China, the People's Bank of China said it will cut the amount of cash that banks must hold as reserves from February 5, freeing up an estimated 1 trillion yuan ($140 billion) to the market.