Oil prices rise on big draw in US crude stocks, China stimulus hopes

Brent crude oil price news: The March contract for Brent crude gained 20 cents, 0.3 per cent, to $80.24 a barrel as at 0128 GMT. US West Texas Intermediate crude climbed 22 cents, or 0.3 per cent, to $75.31 a barrel.

Brent crude oil price news: Oil prices rose on Thursday after data showed US crude stockpiles fell more than expected last week. Image: Reuters

Brent crude oil price news: Oil prices rose on Thursday after data showed US 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.

The March contract for Brent crude gained 20 cents, 0.3 per cent, to $80.24 a barrel as at 0128 GMT. US West Texas Intermediate crude climbed 22 cents, or 0.3 per cent, to $75.31 a barrel.

"A significant drop in the US oil inventories and expectations of China's economic recovery and more stimulus measures supported oil prices," said Toshitaka Tazawa, an analyst at Fujitomi Securities.

TRENDING NOW

"Tensions in the Middle East were also behind buying," he added. US 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 US crude imports (USOICI=ECI), opens new tab as winter weather shut in refineries and kept motorists off the road. US 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.

Maersk (MAERSKb.CO), opens new tab said explosions nearby forced two ships operated by its US subsidiary and carrying US military supplies to turn around when they were transiting the Bab al-Mandab Strait northbound accompanied by the US Navy.

The US 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 US military said.

TAGS:

Brent Crude Commodities