2024.01.2512:25:00UTC+00China Hopes And U.S. Inventory Draw Help Lift Crude Oil Prices

Crude oil prices surged in the backdrop of the recent stimulus measures announced by China as well as the larger-than-expected inventory draw in the U.S.

In a surprise announcement, China reduced the reserve requirement for banks, allowing a liquidity infusion to support economic recovery. The expected economic recovery is seen boosting the demand for crude oil.

The larger-than-expected decline in crude oil inventories in the U.S also supported a surge in crude oil prices. Official data for the week ended January 19 released by the U.S. Energy Information Administration on Wednesday showed a decline of 9.2 million barrels in crude oil inventories in the U.S. Markets had expected a decline of 2.2 million barrels only. Inventories had seen a reduction of 2.5 million barrels in the previous week.

Data released by the American Petroleum Institute on Tuesday had shown a decline of 6.7 million barrels in crude oil inventories during the same period, versus an addition of 0.48 million barrels in the previous week. Markets on the other hand had expected inventories to decline by 3 million barrels only.

Brent Oil Futures for March settlement is currently trading at $80.84, having gained 1 percent from the previous close of $80.04. The day's trading ranged between $81.28 and $80.06.

West Texas Intermediate Crude Oil Futures for March settlement also added 1.1 percent from the previous close of $75.09 to trade at $75.92. Prices ranged between a high of $76.37 and a low of $75.17.