Brent crude futures advanced 25 cents, 0.3%, to $80.29 a barrel, while U.S. West Texas Intermediate crude jumped 31 cents, or 0.4%, to $75.40 a barrel
Oil prices rose on Thursday after data showed U.S. crude stockpiles dropped more than expected last week, while the Chinese central bank’s cut in banks’ reserve ratio strengthened hopes of more stimulus measures and economic recovery.
Brent crude futures advanced 25 cents, 0.3%, to $80.29 a barrel as at 0430 GMT, while U.S. West Texas Intermediate (WTI) crude jumped 31 cents, or 0.4%, to $75.40 a barrel.
A significant decline in the U.S. oil inventories and anticipations 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 said.
U.S. crude stockpiles slipped by 9.2 million barrels last week, the Energy Information Administration (EIA) said.
The draw was driven by a sharp decline in U.S. crude imports as winter weather shut in refineries.
U.S. crude output dropped from a record-tying 13.3 million barrels per day two weeks ago to a five-month low of 12.3 barrels per day 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 nearly $140 billion of cash into the banking system and send a strong signal of support for a fragile economy and slumping stock markets.
China also said on Wednesday it is broadening the uses for commercial property lending by banks in its latest effort to ease a liquidity crunch facing troubled real estate companies.
Meanwhile, 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 Phillip Nova.
There is no actual damage done to crude oil supplies. It is mere anticipation that the Red Sea contagion will lead to further disruption in oil flow from the producing region, she said, 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, she added.