On January 27, oil prices increased after industry data showed U.S. crude stockpiles declined unexpectedly last week. Furthermore, China, the world’s second-biggest oil user, reported its lowest daily growth in coronavirus infections, which bolstered the demand for pick-up.
At 0452 GMT Brent crude futures increased by 0.3% which equals 29 cents and settled at $56.10 a barrel, adding to a small gain on January 26.
Meanwhile, U.S. West Texas Intermediate (WTI) crude futures boosted by 0.4% which equals 20 cents and hit $25.81 a barrel.
According to oil market analyst at Vanda insights, Vandara Hari, WTI is slightly firmer on the back of a larger-than-expected draw in U.S. crude inventories that API listed. Builds balance it in gasoline and distillates.
Furthermore, the American Petroleum Institute reported crude oil inventories in the United States declined by 5.3 million barrels in the week to January 22. The United States is the world’s biggest oil consumer. Analysts’ expected for a build of 430,000 barrels.
According to data, gasoline stocks boosted by 3.1 million barrels, which was much more than anticipated.
Additionally, the API data exhibited distillate fuel inventories, including diesel and heating oil, boosted by 1.4 million barrels. Distillate stocks witnessed a rise of 1.398 million barrels for the week, adding onto last week’s 816,000-barrel gain. In comparison, Cushing inventories declined by 3.475 million barrels.
Analysts say that as oil prices boosted to multi-month highs at the start of 2021. The rally in oil prices seems to have run out of steam and has been range-bound in last weeks.
Market participants are now in wait-and-see mode
ING economics announced that market participants are now in wait-and-see mode. They want to see how lockdowns result in the following weeks and months and how successful countries are rolling out coronavirus vaccines.
However, easing concerns about a sharp decline in travel over the Lunar New Year in China backed the prices. Meanwhile, the number of coronavirus infections appears to be dropping.
On Wednesday, official data revealed 75 new confirmed cases of the virus, the lowest daily increase since January 11.
Typically, hundreds of millions of Chinese travel during the Lunar New Year holiday, starting on February 11. Still, government officials have been begging people not to travel to help hold the recent rise in coronavirus infections.
ANZ Research cited the Chinese Ministry of Transport expects that the number of passenger trips taken will be down 40% from 2019.
