China, the world’s second-largest crude user, gave signs of strong demand from refineries as producers restrict output and as oil inventories in the United States fell unexpectedly. Meanwhile, on Wednesday, oil prices gain on its second day.
Since Nov. 8 and this year’s highest, Brent increased as much as 0.5 percent to 72.10 a barrel. On the flip side, International benchmark Brent crude oil futures gained 29 cents, or 0.4 percent, to $72.01 a barrel.
Higher from the prior settlement, U.S. West Texas Intermediate crude futures were at $64.49 per barrel up at 44 cents, or 0.7 percent.
A commodities analyst said, “Crude oil futures edged up as market sentiments were buoyed by a surprise drawdown in U.S. crude oil inventories and tighter market fundamentals in the current term.”
In March, China’s refinery quantity rose 3.2 percent from a year earlier to 53.04 million tonnes or 12.49 million barrels per day, data from the National Bureau of Statistics showed.
Compared to a year earlier, the first quarter in the economy expanded 6.4 percent.
In a note, a managing partner and head of trading said, “The demand side of the equation got a substantial fillip via today’s China data suggesting prices will continue to move higher on improving global growth and risk sentiment.”
The agreement between the Organization of the Petroleum Exporting Countries and its allies regarding the steady demand growth in China is happening. It includes Russia in limiting the output by 1.2 million bpd in 2019, shortening global supplies.
As the United States executed economic sanctions on OPEC members Venezuela and Iran crude oil, supply has also declined this year.
WTI pushed more than 40 percent this year and Brent up by more than 30 percent on tightening supply and demand fundamentals.
A commodity analyst in Seoul said, “As the possibility of Russia ending the OPEC deal remains, that is capping further gains.”
Higher oil prices were supported by the unexpected fall in U.S. crude inventories
On Wednesday, the Energy Information Administration is due to release the official data regarding the U.S. inventories.
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